Urbanfetch becomes first dotcom casualty

Due to the downturn in the dotcom market, the home shopping Internet firm Urbanfetch has been forced to close its consumer operations.
URBANFETCH, THE AMERICAN-LAUNCHED

home shopping Internet company, has become the first casualty of the downturn in the dotcom market
The company has been forced to dose its consumer operations in both London and New York.
Offering one-hour home deliveries on Internet purchases in London, the com-pany peaked at more than 200 deliveries a day from a warehouse in Elephant & Cas-tle, London, when it launched only five months ago.

The closure follows the collapse of merger talks with direct rival Kozmo.com which has had to make substantial redun-dancies itself
Analysts have long warned that such ser-vices would struggle to make profits as the cost of making one-hour deliveries can be as much as £6 each. Such dotcom firms justified this expense as investing in mar-ket share.
A spokeswoman for Urbanfetch says:
“Right now we must focus all of our efforts on the profitable side of the business, and
for us, at this point of time, that is busi-ness-to-business operations.
“We would have required substantial further investment to have continued oper-ations.
“Costs are always high to start up, based on buying delivery vehicles, and building warehouses.
“It can take up to 18 months to build enough volume in the business. We are not ruling out the immediacy market it is just that at this time we have to focus on profitability