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. Last Updated: 07/27/2016

British Online Retailer Gets Liquidated

LONDON -- High-profile online clothing retailer has collapsed through lack of funds, becoming Europe's first big dot-com failure just six months after its launch.

Appeals to investors for a $30 million cash lifeline failed, despite rising sales.

Efforts to find a buyer for the business also came to nothing.

"We are deeply disappointed that it has been necessary to ask KPMG to become liquidators of the company," said, adding that it had made "strenuous efforts" to raise more funds. co-founder Ernst Malmsten said he wished the company had been able to keep costs under stronger control.

Some 300 staff will lose their jobs. Management was due to brief employees on the firm's demise Thursday, one employee said.

The employee, speaking outside's Carnaby Street office in London, blamed mismanagement for the company's collapse and said operationshad been winding down throughout the week.

"Everyone pretty well guessed it was going to happen. There have been e-mails circulating," the employee added. reported February net revenues of $657,000, almost as much as the $680,000 it reported for the three months ended Jan. 31. But the group's costs were just too much. raised around $120 million last year from big-name investors including French entrepreneur Bernard Arnault, chairman of luxury goods maker LVMH, and Italian fashion house Benetton's controlling shareholders.'s failure highlights investor concerns about the viability of many upstart dot.coms.

According to a growing body of research, many are unlikely to ever turn a profit, especially in the cut-throat business-to-consumer world of online commerce.

A study by PricewaterhouseCoopers published Wednesday warned that one in four British Internet firms could run out of cash in six months.

It said the hunger for cash would hasten the pace of consolidation in the sector driven by need to generate more savings and enhance revenue.

Within the fashion and sportswear industry itself, owners of major brand names are cautious about supplying to young Internet retailers whose cash flows are in the red.

Pentland Group, which owns Speedo, Elles, Mitre and Berghaus brands, made an early decision not to supply to

"[] is going to drag down a lot of very good businesses," said e-commerce analyst Peter Misek of Chase H&Q on the eve of's collapse.

"It has really matured the market - it was the largest Internet [retail] funding ever in Europe and it has taught people some very hard lessons about remembering to get the business plan," he said.