Boxman cancels IPO, Dressmart ponders existence

Q. What do all these companies have in common: Boo.com; Letsbuyit.com; Boxman.com; Dressmart.com?

A. They are or were all B2C Web businesses founded by Swedes.

At the height of the dotcom madness - you remember, it was only March - newspapers and new media rags were full of irrational guff about Sweden, and what a marvellous country it was for ecommerce pioneers, and how it was two years ahead of the planet when it came to understanding the Internet.

Since then it has become all too clear that Swedish entrepreneurs are no more sprinkled with pixie dust than the rest of us. Boo went down in flames and Letsbuyit.com just - only just - got away in time with its IPO.

Now it looks like Boxman has some refinancing issues to resolve, while it seems like Dressmart is in serious trouble.

And no, we don't think Sweden is any worse than any other country (this is a week that has seen three UK B2C firms Clickmango.com, Leisureplanet.com, and Independent Mortgage Brokers intend to close down, scale down or go bust). It just ain't any better.

Boxman, the CD and games online retailer, has put its plans for a £200 million on ice and is facing an "uphill struggle as investors go cool," according to the Daily Mail.

Riches to rags

And it looks like curtains for Dressmart.com, the upmarket European online men's clothes retailer, which shut down its UK office on Friday. It gets worse - according to Net Imperative (a scoop! at last! Well done!), Dressmart has appointed a "major management consultancy" (surely an accountancy firm?) to handle its liquidation. This follows the decision of the backeers to stop funding the Swedish-owned retailer any further.

Dressmart is a heavy ad spender in the UK market (the third biggest according to Fletcher Research), so its departure from the UK scene will come as a blow to online and offline publishers alike.

Living in a cardboard box

It's a different story for Boxman (No. 2 in the Sunday Times eleague of Europe's top 100 privately held Internet firms. There is no suggestion from the Daily Mail that the company is in financial trouble.

But the paper notes that Boxman suspended a planned IPO in June and points to a statement from chairman Jan Carlzon in April that the company would need "'significant further investment' and would therefore float in London and Stockholm. He then quit
quit, citing personal reasons".

In a statement, Boxman says: "We will need to rais e money. We are not in trouble. It is inevitable that people will speculate. This will continue until we make a decisive move, either a transaction or a fundraising. Our sales are up year-on-year. We believe we will deliver profits in the end."

Founded in Sweden, Boxman moved headquarters to the UK (bigger market, more corporate finance bods).The company operates in eight countries and has raised more than #&163;60 million. But as the Daily Mail points out, "the trouble is that even deep pockets get emptied online".

In other words, the company will need to go for an IPO sooner rather than later, even if conditions are less than ideal.

We think the Daily Mail is wrong here - if the company's prospects are strong enough, investors will continue to back it, until the investment bankers decide the time is right, either for an IPO or a trade sale.(Jungle.com has a similar comfort zone, with 3i re-financing the company in lieu of an early IPO.) ®

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