Letsbuyit.com searches for White Knight

The company has indicated it is considering a 'bricks and mortar' partner to provide consumers with all channels of communication.

In an exclusive interview with silicon.com last month, Haken Ramsin, former CEO of Letsbuyit.com, said: "Letsbuyit.com needs additional funding soon which will be hard to find. The business model is viable but the market conditions have not been on our side. With 90 per cent certainty, the company will be bought by a large chain or an established bricks and mortar player."

The company yesterday announced third quarter results which showed it had cut costs by scaling down advertising and marketing budgets. CEO Martin Coles said: "We have achieved this by concentrating our efforts on targeted, more cost-effective online and viral sales and marketing activities and by leveraging off our one million members. Their average spend and levels of repeat purchase make our knowledge of them incredibly valuable."

The company recently laid off 20 per cent of its workforce in an attempt to cut costs. Redundancies were made across 14 European countries as the company centralised operations in Germany, Sweden and the UK.

Budget cuts have helped Letsbuyit's cash assets grow to E50.6m (£30.2m), an important move as investors are increasingly examining figures to see if internet companies will survive cash-flow problems.

By Nik Hole