It is not only high-profile western investors like Bernard Arnault and the Benetton family who had their fingers burnt in the spectacular collapse of Boo.com – the online clothes retailer. The Financial Times reports that prominent middle eastern investors also lost millions when management called in the liquidators yesterday after they failed to secure a new round of funding.
Omnia, an investment fund backed by members of Lebanon's wealthy Hariri family, is believed to have put $40m into the business – the largest contribution of any single investor – while Sedco, understood to have the backing of Saudi Bin Mahfouth banking family, put in $10m.
Boo.com, launched with much fanfare in over eighteen countries less than a year ago, needed $30m just to keep trading. But having already blown $135m on marketing and set-up costs, it found little willingness among its existing backers or other investors to give it the cash lifeline it needed. So yesterday management had little choice but to cease trading and appoint accountants KPMG to wind up the firm.
PEO comment: How convenient for its European and US backers that just as Boo.com calls in the liquidators, it should emerge that the failed e-tailer's biggest investors should be members of the Middle Eastern royal elite?
Funny how this didn't emerge when Boo.com was a cool, sexy retailer of trendy urbanwear clothing and the likes of Bernard Arnault and the Benetton family were falling over themselves to be associated with it. But now that someone needs to carry the can for backing an over-hyped, expensive flop, it is time for its shy Middle Eastern supporters, Omnia and Sedco to step forward into the media spotlight and be associated with Boo.com's demise.