E-tailer Boxman 'facing liquidation'

Boxman is reportedly facing liquidation

The online music retailer, Boxman, is reported to be close to liquidation.

The firm is one of Europe's highest profile e-tailers, and its demise would represent the biggest blow for the under pressure sector since the collapse of Boo.com in May.

According to the UK's Financial Times newspaper the firm has failed to raise the cash necessary to carry on trading.

The newspaper said Boxman's website was suspended on Monday night. They were not accessible on Wednesday morning.

Boxman, like Boo.com a pan-European operation, was forced to abandon plans for a £300m flotation in April following the tech stock tumble in the second half of March.

Herd mentality

Since then investor sentiment has changed towards online retailers, with many finding it difficult to persuade investors to back them.

The earlier strong appetite to invest money had been underpinned by the belief that after two or three years establishing a presence and brand online, e-tailers would be able to start turning in huge profits.

The newspaper quotes Tony Salter, Boxman chief executive, as saying that there could not be a more negative mood towards etailers.

"There is a herd mentality and the herd is stampeding in the wrong direction," the newspaper quotes him as saying.

Boxman was launched in 1997, operates in eight countries and has investors ranging from Madness singer Suggs, Swedish band Roxette and former chief executive of Polygram Alain Levy, it is reported.