UK: Investors call time on lastorders.com
lastorders.com, the B2C drinks e-tailer, has ceased trading after its management team decided to call time on the venture once further investment dried up.
Investors could lose up to £2.5m as the company directors sell off assets and domain names to try and re-coup some of the original investment. lastorders.com began trading in 1999, set-up with £250,000 from the family of co-founder James Oliver.
In a statement, he blamed "the sluggish B2C market conditions allied with the rapid evolution of our business towards major brands" as the main reason for the e-tailer's demise. Problems with the company's institutional investors to provide adequate support was also cited, and reports are that the company came to blows with the Royal Bank of Scotland over its business plan. RBoS was supposedly unhappy that the company had changed its focus from being a pure online off-licence to a broader B2B operation allowing companies such as Guinness to communicate directly with its customers.
A spokesman for RBoS denied the claim: "All investors were unanimous in their decision to stop funding the company. There was no difference in our approach," he said.
Neil Broome, drinks analyst for Datamonitor, told just-drinks.com he was not surprised by the news. "Its business model never really offered more than a standard off-licence. In early September last year, it changed to become a bulk-buy operation for spirits, wine and beer, targeted at the student market which was clearly a sign of desperation."
He said the delivery costs were too high for selling just a bottle of Scotch or a four-pack of beer and the distribution network could not compete with the bricks and mortar retailers such as Tesco or Majestic Wines. "It was being squeezed by retailers and the local off-licence. People would still rather walk to their local store than go online and order a four-pack of beer which arrives 24 hours later," he said.
lastorders.com's management, however, hope to shortly relaunch a business which will build on their B2B business lead. It will focus on providing ASP technology and infrastructure solutions to branded FMCG producers. According to the company, "it will allow them to communicate and transact directly to their own consumers, in their own image, via any digital platform across a multitude of countries."
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