Doubts over Boo sell-off

Boo two: Kajsa Leander and Ernst Malmsten

Hopes for a quick sale and turnaround for collapsed online fashion retailer Boo.com are fading amid reports that potential buyers are dropping out fast.

The firm's administrator, KPMG, had hinted at a quick sell-off within one week after it had received more than 30 inquiries from potential buyers.

The infrastructure has a huge capacity - this represents a real point of interest for potential buyers

Mick McLoughlin, KPMG, on Friday

However, Boo's strongest selling point - its ability to serve customers in 18 countries - seems to have evaporated. A report in the Observer newspaper suggests that Boo's distribution system was in fact run by Deutsche Post in Europe and United Parcel Service in the United States.

Boo is said to owe both firms more than $25m.

On Friday, KPMG's Mick McLoughlin had said that Boo's infrastructure had "a huge capacity", which would represent "a real point of interest for potential buyers".

Boo.com was forced to call in the administrators on Thursday, after investors failed to provide the firm with a fresh cash injection of $30m (£20m).

£1m cash deposit

The number of bidders also dropped sharply after KPMG asked them for a £1m ($1.5m) deposit to prove the seriousness of their intentions.

But if the report about Boo's distribution system is correct, the collapsed web retailer would be left with only a few assets: Its surplus stock, its snazzy but difficult-to-use web site, and its top-notch staff.

Boo.com might soon be without the latter.

As the news of boo's cash-flow problems broke, headhunters began to circle its offices trying to recruit the cream of its personnel. Any delay will increase the chances that rivals poach Boo's staff.

The doors at Boo's posh Carnaby Street headquarters could close for good by Wednesday if no buyer is found.

The blame game

Sunday newspapers in the UK, meanwhile, were full of articles trying to attribute blame for Boo's demise.

The firm's Swedish founders, former model Kajsa Leander and Ernst Malmsten, pointed the finger at risk-averse investors, arguing that the company had just turned the corner but was not given the opportunity to prove itself.

Mr Malmsten told the Sunday Business newspaper: "I do not think the bankers understand the e-commerce area and how complex these companies are."

Innovative, but in debt

During its six months of trading, Boo spent its £80m ($120m) initial funding and piled up debts of about £17m ($25m).

Its creditors are mainly advertising companies and delivery firms.

Among investors, the Lebanese-backed Omnia fund is reported to have been hardest hit.

The Financial Times says it put $40m into Boo over the past eight months, and that Sedco, a Saudi Arabian-backed fund, put in about $10m.

Boo's website was one of the most sophisticated retail sites on the web - although its cutting-edge technology was one of its downfalls.

Users needed computers with the latest web software to use the site and high-speed internet access if they were not to endure long waits for pages to load.