06 February 2001
 Then There Were Two, Then One.. |
U.S. on-line retailer
Petopia.com
which merged with retail chain partner
Petco
on 5th December last year when Petco acquired virtually all Petopia's assets,
has finally disappeared altogether.
In a filing to the U.S. Securities and Exchange Commission on Friday it cancelled its $100 million Initial Public Offering (IPO) and announced that it was no longer trading. The U.S. Story.. Petopia was launched in August 1999 offering pet food and pet grooming and health care products. In October 2000 it laid off 60% of its staff and as we reported in December was finally bought out by Petco, an original investor in the Petopia site. The two remaining major players in the U.S. on-line market are backed by established bricks and mortar operations. Petco has 530 outlets across the states and arch rivals PetsMart.com is supported by PetsMart Inc. which opened its first store in 1987 and now has 525 stores. PetsMart.com was also forced to back out of its planned $115 million IPO back in November. At the same time PetsMart bought up the internet address Pets.com when that wholly on line venture collapsed with the loss of 300 jobs the same month. The U.K. Story.. On line pet product retailers in the UK were also hit hard last year by falling confidence in Dot-com markets. Premium Petcare Limited In Liverpool last August directors of Premium Petcare Limited, the company behind the Pets Pyjamas web site found themselves unable to raise additional funding from shareholders. As a result they appointed Ernst & Young to help sell off parts of the company. When no suitable buyers were forthcoming Scott Martin and Andrew Wollaston of Ernst & Young were appointed joint administrators on 14 November and the site (temporarily) ceased trading. Premium Petcare had begun trading in 1997 as a pet products mail-order company. It launched the Pets Pyjamas site in May 1998. By February 2000 Premium Petcare had raised the funds to acquire a French mail-order/e-commerce pet product company Kenix, and the UK based veterinary information company Vetstream plc. Investors were relying on the planned floatation of the company but as the market grew ever more skittish about Dot-com stocks it became apparent that the IPO would have to be abandoned. Already tied into contracts based on the IPO, Premium Petcare was left with mounting costs. By July of last year its shareholders were putting pressure on the board to sell. Meanwhile.. Under the directorship of Garret O'Leary and Nigel Cayzer, Petcentre Limited, the precursor to Petsonthebrain.com (UK) Limited was born in October 1999 using the directors' own capital. By December the company had acquired additional venture capital investment, began recruiting and opened offices in London. Distribution channels through veterinary clinics were established and the petsonthebrain.com discounted pet products retail web site was launched in April 2000. The company's key financial backer, providing the bulk of additional investment throughout the summer of 2000 was The Consulta Smaller Companies Fund, a specialist venture capital fund run by Consulta Limited. However funds were tied to the meeting of targets and when these were repeatedly missed additional funding was witheld. Eventually, in November 2000 and with serious cash-flow difficulties Petsonthebrain.com wrote to its creditors asking them to forestall immediate payment of its bills while efforts were made to raise funds. And Then There Was One On the 22nd November 2000 a company, Mazedraw Limited, newly formed by Consulta, bought the remaining stock, assets and goodwill in Premium Petcare Limited for £700,000. One week later, on the 29th November, and the day before Petsonthbrain.com (UK) Limited began dismissing its staff as it went into administration, Pets Pyjamas Limited issued this statement: "The Consulta Smaller Companies Fund, a specialist venture capital fund advised by Consulta Limited in London, has acquired a majority equity interest in Pets Pyjamas Limited.." The statement went on to say: "The Consulta Smaller Companies Fund also has a significant investment in petsonthebrain ("POTB"), a company that was set up to provide an e-commerce solution in the pet products space working in partnership with the veterinary community. Consulta, together with an investor group, plan to merge the two companies to create a market leader in the sector." "The enlarged group will be in a position to capitalise on the combined business strengths of the two companies. Alistair Angus, Chief Operating Officer of Pets Pyjamas, and Garret O'Leary, Chief Executive Officer of petsonthebrain, plan to work closely together under the chairmanship of Nigel Cayzer in taking the Group forward." To complete the absorption of Petsonthebrain.com, Alistair Angus former director of Premium Petcare Limited and now as director of Mazedraw Limited wrote to the administrators of Petsonthebrain.com (UK) Limited offering to purchase the remaining assets and goodwill in Petsonthebrain.com (UK) Limited for a total of just over £168,000. The Millenium Hangover Today, at a meeting of creditors of Petsonthebrain.com (UK) Limited, somewhere in the region of seventy suppliers to the failed venture were being offered around 25 pence in the pound for their unpaid bills in a proposed voluntary arrangement to avoid liquidation of the company. Creditors of Premium Petcare Limited are due to meet next week to discuss a similar arrangement which offers them around 20 pence in the pound. This article may be reproduced with permission of the author and correct attribution to the source. |