Brand Failures

252 Brand failures
parties and high living centred around the boo headquarters in London’s
Carnaby Street.
Malmsten now maintains that the company’s extravagant reputation
‘masked the reality’ of the sheer amount of work that went on behind the
scenes. Indeed, he reckons the 24/7 commitment his staff (or rather, ‘boo
crew’) devoted to their task especially around the launch period, hadn’t been
seen since World War II. ‘To understand this kind of total devotion to a cause
you probably had to be in Britain in about 1940, when car factories were
turning out aeroplanes or tanks overnight,’ he writes in boo hoo, with no
apparent trace of irony. But however hard everyone in the company was
working in November 1999, the atmosphere had changed by the following
February.
According to boo’s financial strategist Heidi Fitzpatrick morale was low.
‘We were out every lunchtime getting shit-faced. There was no management
and we all went home at six instead of working all hours.’The reason for such
low morale is represented by the figures. In a period of 18 months, the
company had managed to get through approximately US $185 million that
had been raised from high-profile investors such as Benetton, J P Morgan,
Goldman Sachs, the French fashion conglomerate LVMH and the Lebanese
Hariri family. How much of this money financed the first-class flights and
Krug-swilling lifestyle boo was becoming increasingly famous for is impossible
to say.
One thing, however, is for sure. There simply weren’t enough customers.
Deterred by a problematic Web site which concentrated on fancy design
rather than straightforward product information, few people were willing to
make the effort in any of the 18 countries where boo had a presence. In the
first month after its November launch boo managed to sell around US
$200,000 worth of stock, from which it profited half. Not bad by most e-
commerce site’s standards. But then, most e-commerce sites aren’t capable of
spending around US $20 million in a single month (as boo did that November).
Although sales figures slowly increased, they weren’t doing as quickly
as boo had anticipated. Between February and April 2000, total sales were
US $1.1 million. Unable to raise any more money from its investors, in May
2000 boo.com shut down and filed for bankruptcy.
In their final press release, one of the most famous statements of the
dot.com era, Malmsten and Leander put their side of the story: