The UK subsidiary employs 74 staff in its London, Swindon and Belgium offices, most of whom will be laid off this month, the remainder staying on to wind down the company.
The eToys.co.uk home page today shows the children’s TV character Bob the Builder with the message: “Can we fix it? No we can’t! Sadly, eToys packs up its toy chest on January 19th, but to thank you for all your custom, we’re offering 50% off the original price of all stock!”
Another notice on the site explains,
“eToys.co.uk has performed really well, quickly becoming the number one retailer of children's products in the UK. But unfortunately, the disappointing recent performance of the company as a whole and the negative capital market conditions have forced us to close down.”
Etoys.com was rated the second most popular shopping site in the US over the Christmas sales period, beaten only by Amazon.com. However, sales were around 50% weaker than expected and the loss-making US company is reported to be fast running out of cash.
Negative market sentiment is causing funding problems for the internet-only retailers, known as pure plays, while traditional retailers have been able to subsidise their on-line operations. According to research group Forrester, 88% of all on-line retail spending in Europe will be accounted for by traditional retailers rather than pure plays by 2005.