E-tailer Boxman seeks liquidation

CD retailer may still have one buyer left

Online CD retailer Boxman is seeking voluntary liquidation after failing to raise vital cash needed to keep trading.

The company's collapse would make it the highest profile business-to-consumer dot-com casualty since fashion e-tailer boo.com in May. Since then, several dot-com businesses have crashed including health retailer clickmango and games site URwired.

Boxman withdrew its £300m IPO in April. The company suspended its Web site Monday, and is currently requesting approval from investors and creditors to go into voluntary liquidation. Talks are still in progress and chief executive Tony Salter has two weeks between now and the vote to approve voluntary liquidation.

One unnamed bidder may be in the running to save the company from collapse. Slater claims there is a 50 percent chance of this deal succeeding.

Boxman has raised £50m of investment since its launch in 1997. The company needed to raise £20m in its September round of funding, but was unable to secure support for more than £5m. In the first half of this year the e-tailer made losses of £24.1m from a turnover of £5.8m. Boxman's problems are reflective of the way in which investors have turned on the business-to-consumer Internet market this year.

Ernesto Schmitt, president of music download Internet site peoplesound.com said "pure e-tailing doesn't work -- Boxman was inhabiting the deeply unfashionable e-tail space that is incapable of delivering real value".

Boxman could not be contacted for comment.

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