UPDATE: Clickmango collapse raises doubts over e-tail future

Clickmango founders Toby Rowland, son of late tycoon Tiny Rowland, and Robert Norton, who launched their company on the Web in April, are to shut down the business in order to trade on a solvent basis until the end of August rather than wait until then without the promise of further funds.

The site, which counted TV celebrity Joanna Lumley as a contributor and shareholder, said it would honour all orders until the end of August.

Norton said: “We have been in discussions with strategic investors over recent months. There is a lot of interest but unfortunately, it is difficult to move as quickly as we would like. Rather than risk insolvency, we're closing the company down while we have plenty of money left to meet all of our obligations and give our staff time to find new positions.”

Rowland confirmed to netimperative.com that ClickMango had been in discussions with major offline retailers, including Boots, the major supermarkets, and health insurance companies about strategic partnerships which could have provided a lifeline for the company.

However, the talks, which might have involved own-label deals, in return for extra funds, were stalled to a point where the company felt it could not last until their completion.

Rowland said: “I genuinely believe that if we could have made it until the autumn, we could have had deals in place, but it wasn't to be.”

Rowland confirmed that he and Norton had been asked to come up with other internet-based ideas for Clickmango's major investor Atlas Ventures, which contributed the major proportion of Clickmango's initial 3m seed funding.

However, he added: “I suspect Rob and I need a bit of rest after this. There will be a period of reflection once we have wound [Clickmango] up.”

The shut-down at Clickmango.com has coincided with news that ToyCity.com, a Denmark-based pan-European toy e-tailer has also ceased taking orders due to lack of funds.

The two are casualties of a dotcom fallout predicted following the collapse of fashion e-tailer Boo.com in May. The Net Imperative Ltd, operator of netimperative.com, itself entered liquidation proceedings in May but was subsequently bought out by a consortium of investors led by the Internet Business Group.

However, pure online e-tail models, such as Clickmango's, have now been thrown into serious doubt following the news.

Combined with the performance of even leading businesses such as Amazon, which in a matter of weeks has seen its valuation drop from $100 per share to just $30 in the US, pure online plays are failing to secure either funding or faith from venture capitalists and even dotcom bosses.

Indeed Thinknatural.com, and Nutravida.com, Clickmango's closest rivals in the UK, are both pursuing strategic partnerships with bricks and mortar retailers to merge their operations in various ways, rather than continuing to search for extra venture capital or through public flotation.

Nutravida CEO Trevor Millett said: “Our plans to float have been on hold for some time and I can't see feeling towards IPOs changing in the short-term and to be honest we are not sure when good feeling will come back. That means we are in the same position as many dotcoms. The only way we can secure funding for now is through private placings or strategic partnerships.

“There is no-one getting second round funding and most dotcoms have not got enough to see them through to profit. Everything, but especially b2c is considered too high risk.

“To be honest I think Amazon will prove to have been the exception rather than the rule. The number of pure online retailers will be few and far between.”