I have written before I never liked the look of retail dot.coms as investment vehicles.
So I was interested to see the most hyped flotation of the past year, lastminute.com, has taken a tumble in the markets. The shares, which were floated with great brouhaha at 380p, are now trading below 100p.
I believed, and still believe, that in Britain, where the majority of the population is close to shops, it would take time to change shopping habits. Buying a book online is one thing. A book is a book is a book. But where there is an element of choice, such as buying a shirt or groceries, I reckon people like to feel the quality and the width.
However, I thought sites selling pet food and accessories would be an exception. The reason is personal experience. A year ago, after fighting a rearguard action, my wife decided to buy a lurcher. It is not that I do not like dogs but we have three children, I have an ancient mum and there is also a cat. As I work at home I knew who would have to walk the brute, I mean dear little thing, during the day.
My wife has gone completely mad over the dog. She cuddles and cossets her and talks to her in a silly language. And the dog gets elaborate meals of turkey and rice while the rest of us make do with a sandwich. There are vet's fees, winter coats, toys and goodness knows what else. If my wife is typical, and I gather she is, then pet sites should be sure-fire hits.
But apparently they are having their troubles like other e-retail sites. In the US, which is usually ahead of the UK in these matters, San Francisco-based Petopia.com recently laid off 120 people, 60 per cent of its work- force, as it struggled to build up custom.
Last week. Pets.com, supposedly one of the more robust of the litter of e-retailers, announced it was winding down its business. It was floated nine months ago and never regained its original price of $11.
In Britain, where pet sites were supposed to be the fat cats of the online world, as they scooped the market of £3bn for pet products and services, it is proving more difficult than anticipated to build up business.
Pets-Pyjamas spokesman Mark Waring said: "We have a traditional catalogue business as well. It is very hard to make money solely as an internet business. More and more dot.coms are introducing catalogues."
Petspark.com is also finding it a hard road to early profitability. Petplanet.co.uk. hopes to become profitable next year but is aware that with venture capitalists now taking fright and refusing to cough up more money, the huge cost of advertising can gobble up funds before the black ink is spotted.
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