Boo
14 June
Never let it be said that this journal does not keep you up to date with current
trends and is happy to rub shoulders with the quoted. Read the article for
interest if you like but do keep going for the late appearance of
an old friend and follow the link for a reminder if you will.
Article from The Times 14 June 2000
Where do you go after your online company's
£85 million crash? Chris Ayres reports
on the resurrection of the Boo Crew
Life after the crash
No one knows exactly what happened inside the Carnaby Street headquarters of Boo.com on the morning of Thursday, May 18. There were tears, naturally; breakdowns, possibly. There was even a subdued round of applause, if one report is to be believed.
What is certain, however, is that after the world's biggest online fashion retailer went bust, 300 young people who had previously thought of themselves as role models for a generation of dot-com entrepreneurs were out of work. In the lingo of the New Economy, they were not so much unemployed as unplugged.
Since that morning, The Times has tracked four former members of the "Boo Crew". The bad news for the media pundits who pompously declared that the collapse of Boo was a welcome comeuppance for Britain's upstart "digerati" is that two have gone on to get better jobs with even bigger salaries at so-called "dot-corps" - the Internet offshoots of well-established, profitable companies. Another has taken a job with Dan Wagner, the entrepreneur who bought Boo's software system for the embarrassingly small sum of £250,000. The other has remained (temporarily) unemployed.
No other Internet company managed to capture the insanity and the glamour of the dot-com boom quite like Boo. And, before Boo, no other Internet company managed to run out of cash in such a spectacular fashion. During its 18-month existence, Boo burnt through £85 million - comfortably more than £1 million a week. Not hard when you have directors flying club class to San Francisco every week and sales executives enjoying foie gras in their favourite Soho eateries every lunchtime. Boo generated lots of receipts, but no profits.
Luke Alvarez is one of many employers who does not care about the fact that Boo spent its tortured existence lurching from one corporate disaster to another. He has already signed up one former member of the Boo Crew and intends to employ more. His enthusiasm is understandable: the 32-year-old executive worked at Boo in the early days before leaving to take his present job at the Internet division of Emap, the media group. "Boo effectively spent £85 million educating 300 people on how to launch and how not to launch an Internet retailing business," says Alvarez. "No one else has had that experience. That lesson has a certain value in the market."
Sarah Arundel was one of the first to be signed up by Alvarez when Boo went under. Just 27, and with a first-class degree in history from Cambridge, Arundel was a typically high-flying member of the Boo Crew. Before joining last June as senior manager in charge of strategy and corporate planning, she had worked as a consultant at the accountants PricewaterhouseCoopers.
'No Internet company has run out of cash
in such spectacular fashion'
By the time Boo went bust, Arundel had already decided to leave. "I was fortunate in that I'd spent about a month thinking about it," she says. "By Wednesday night, when Boo went bust, I had about three job offers. The day it all hit the press, I had another four. I had cleared most of my stuff by the morning."
She admits, however, that the last days of Boo put an enormous strain on her, both emotionally and physically. "I had been phoning all the investors to see if they would take the allocation of the money that we needed," Arundel says. "I was aware of the time ticking by. By 7pm it became apparent that it just wasn't going to happen. At the board meeting at 8pm, I became 99 per cent sure that they were going to approve liquidation."
The next day, Arundel visited Boo's Carnaby Street headquarters for the last time. "I desperately needed to get hold of my assistant who was in Greece on holiday," she says. "I felt bad for her because she went on holiday with a job and came back without one. There were some people in tears and some people were really, really angry. It was a hideous realisation that people couldn't pay their mortgages at the end of the month."
The trauma ultimately affected Arundel's health: "I'm a very healthy person but it was just the stress of it all. I went home to my parents. I was also in the middle of buying a flat. It was sticky for about half a day." Luckily, Arundel was signed up by Emap just a few days after Boo's demise, and could show proof of employment to her mortgage lender.
Things did not go so smoothly for Esther Galan, Boo's former public relations manager and head of internal communications. Galan, 36, an American who worked as a soap opera actress and a freelance film script-reader before taking the job at Boo, started out working as personal assistant to Ernst Malmsten, one of Boo's Swedish founders. An efficient networker and quick thinker, she quickly rose up the ranks.
'We were living on adrenalin'
The speed of her promotion within Boo has made it difficult for her to find a job on a similar level elsewhere, however. Galan, who rents a trendy loft apartment in Clerkenwell, Central London, says that she has been "coming down" since the company collapsed.
"We were living on adrenalin for so long," she sighs. "I was quite scared when it went down because I thought: what am I going to do next? I was about to work on the branding of Boo, but because of my lack of experience I won't be able to go into branding now."
Galan has received a job offer but has yet to accept it. Money is not an urgent problem: her husband is on the Financial Times. "I'm not one of those people who had to go out temping. There was one guy who got a call from his bank manager the day Boo's collapse hit the press to cancel his mortgage. I'll probably start freaking out in about a month! I'll start looking at recruitment agencies next week. I don't want to work for another start-up. I don't want to work for someone who's learning their business."
The collapse of Boo appears to have had a more profound effect on Galan than on Arundel. "Suddenly, it was like 'bam!' and Boo had to find money," she says. "I know that Ernst and a lot of us felt that, right until the very end, investors would come through. It was like standing on the edge of a cliff, knowing that you've got to jump but you don't want to."
Galan admits that she found it hard to let go of the company. "It took me a while to clear my desk," she says. "I just couldn't do it. They kept the office open for a week afterwards. A lot of people walked out with their laptops. We got our last pay cheque on April 25. By that point we'd been working for three weeks in arrears. I didn't start working on my CV until last week."
Tim Nicholson, 42, was one of the few employees at Boo who had serious long-term responsibilities: a mortgage and a family. He had joined Boo in February last year as a technical consultant, having previously run his own computer services firm. By May he had been made Boo's global technical services manager.
To Nicholson, Boo's collapse did not come as much of a surprise: "It had been a real rollercoaster with people flying out to Spain all the time to meet financiers. It was more of a relief than anything else. Then the panic set in. Unlike other people I had a family, children and a house to consider. You think: I haven't got a job and all that money I was going to be paid, I'm never going to see that."
Nicholson has particularly vivid memories of the morning after the collapse. "We all congregated in the office and met the members of the press, the sharks and the liquidators," he says. "I went to one of the headhunters' meetings." These involved headhunters putting thousands of pounds behind the bars of Boo's local drinking establishments. "When we first talked to the liquidator we were all told to go home, apart from 25 of us who were taken on, and another six who had valuable information and were hired as advisors," he says.
'I didn't want my CV to say: can keep my head
during liquidation'
"There was quite a lot of camaraderie. On Carnaby Street you would see crowds of people from Boo wandering about. On the Friday I'd made contact with someone who was very interested in hiring as many Boo employees as he could. I met a consultant on Tuesday, then the client on Friday, and was told verbally 'I'd like you to come on board'."
Nicholson was about to move into a new house. "I had to be very careful that I didn't allow my bank or building society to find out," he says. "It was quite a fraught period. Fortunately, I've managed to find alternative employment very quickly. I think that working for Boo certainly helped on that front." He now works for Computer Sciences Corporation, earning more money than he was on at Boo.
James Cronin also worked on the technical side at Boo. Cronin, 23, was one of the precociously bright über-nerds (he studied physics at Oxford) who designed Boo's online ordering system. Before Boo, he had worked for both Virgin Net and EasyNet. Cronin's in-depth knowledge of Boo's technology meant that he was invaluable to KPMG, the accountancy firm hired to sell off company assets. "What we built was really good. It would be a shame if all that was lost," says Cronin.
In the three weeks after Boo's closure, Cronin entered negotiations, first with Dan Wagner's Bright Station, which paid £250,000 for Boo's in-house software, and then with Fashionmall.com, the US Internet company that bought Boo's online "domain name" and brand for an undisclosed sum. His job was to persuade potential buyers of the value of Boo's technology.
Throughout the negotiations Cronin was being pursued by American Express. He was one of 17 Boo employees who had signed up to the corporate Amex card scheme. They had all foolishly ticked the "joint liability" option on the application forms. This made them liable for their corporate credit card debts after Boo's collapse. The total bill for 17 cards was thought to be about £15,000, mostly corporate entertaining expenses.
Cronin has decided to join Bright Station to help to put Boo's technology to other uses. Of the past weeks, he says: "It's not something I'd like to put on my CV - 'Would be a great asset to a failing business. Can keep my head during liquidation'."
Article ends
And let me tell from the highest authority that, in the case of our dear friend
James, it is not only a dot com company that can go down on you.