|Foundation date||April 1998|
|Founder(s)||Martha Lane Fox and Brent Hoberman|
|Key people||Matthew Crummack, Chief Executive Officer
Mark Maddock, Managing Director UK & Ireland
|Alexa rank||1,668 (as of October 2011[update])|
Lastminute.com is an online travel and leisure retailer. The company was founded by Martha Lane Fox and Brent Hoberman in 1998 and was a part of the UK internet boom of the late 1990s, part of the dot com bubble and trading on the London Stock Exchange under the symbol 'LMC'.
From foundation to flotation: April 1998 to March 2000
By January 2000, Lastminute.com had more than 500,000 regular users and its offering had expanded to include travel, gifts and entertainment. The company specialises in selling distressed inventory.
Ahead of its flotation, the company raised a further $31m from seven new investors; BAA led the round with a commitment of £13.25m. The other investors in this round were Bass Hotels & Resorts, Sony Music Entertainment, Mitsubishi Corporation Finance, Vivendi's Viventures, Starwood Hotels and priceline.com. These joined previous investors including Intel, Deutsche Telekom, France Telecom, Harvey Goldsmith and Global Retail Partners. At the time it opened offices in Paris, Munich and Stockholm. In the ten months ending December 1999, the company handled £37m of transactions, which generated £330,000 of income.
It floated on the London Stock Exchange on 14 March 2000. The shares were placed at 380p, valuing the company at £571m. The share price rose on the first day of trading to 511p, giving a valuation of £768m, before falling back to 492.5p later in the day. The paper wealth of the founders of the business went up to around £300m.
250,000 private investors had applied for shares in the flotation. 33m shares – 25% of the company – were being offered for sale, the bulk of which went to institutional investors. Private applicants received just 35 shares each.
Public listed company: March 2000 to May 2005
Within two weeks of listing, the share price had dropped to 270p. In the first week of April, the shares dipped below 190p, half the issue price. On Monday, 17 April 2000, after the biggest ever one-day fall in the New York stock market on the preceding Friday, £35bn were wiped off the value of the London Stock Exchange. By now, Lastminute.com was trading at 30% of its flotation price.
Its share price was rising again when Lastminute.com announced its first quarter's results on 6 May 2000. The company had handled £7.16m of transactions, up 68% compared with the previous period. During this period, the company had invested heavily in a new version of the website as well as international expansions. These factors pushed pre-tax losses up from £6m to £11m. The market responded positively at the better-than-expected figures and the shares closed the day up 8p at 245p. Two weeks later, however, the shares closed at 141p, as concerns over dotcom stocks increased, when boo.com went into liquidation.
Allan Leighton, the former head of Asda and president of the European division of Wal-Mart, joined the company as non-executive chairman on 20 October. The role was unpaid but he was granted options over 1m shares at a strike price of 137.5p. The market reacted with a 9p drop in the share price to 128p.
Lastminute.com shares sank below 100p for the first time on 8 November and closed at 80p on 10 November.
Full year results to 30 September 2000, announced on 4 December, were slightly ahead of analyst expectations. Losses increased from £4.5m to £35.7m, while transaction value increased from £2.64m to £34.2m, excluding transactions by Degriftour. The company generated more revenue from interest payments than from ongoing business activities. Shares rose 4.9% to 75p.
In November 2001 the company reported a £54m loss.
In November 2003 Martha Lane Fox announced that she would step down as managing director at the end of the year – in which the company made its first pre-tax profit of £200,000, short of analysts expectations of £4m.
The company was acquired in 2005 by Sabre Holdings, owner of online travel company Travelocity, paying 165p per share, a 57 per cent premium to the share price before the company revealed it was in takeover talks, but less than half the flotation price. The deal valued Lastminute.com at £577 million.
Up until 2005, the company had not made a net profit since it floated five years earlier. In February 2005, it reported pre-tax losses of £26.5m.
Brent Hoberman stayed with the business until spring 2006 when he handed over the reigns as CEO to Ian McCaig.
Following acquisition, a number of Sabre/Travelocity executives joined Lastminute.com between 2005 and 2007, including Ed Kamm (former CFO of Travelocity, who was to succeed McCaig as CEO at the end of 2010), Damon Tassone, Josh Feuerstein (who are now co-founders at Intent Media) and Arun Rajan (now CTO at Zappos).
The team was further increased by the arrival of Brian Murphy to head up Holiday Autos and MedHotels (he had previously been at Hertz, Thomas Cook and American Express) Simon Thompson as CMO (who had previously been at Honda and Motorola and subsequently went to Apple), Joe Kenny from Cisco and Arnaldo Munoz from easyJet.
During 2008–2010, hires included Alistair Rodger (formerly Commercial Director at Hilton) and James Donaldson (who joined from News International to replace Kamm as CFO) and Mark Newton from AMEX.
It was the above teams of executives that led the business through a five-year period after the acquisition which was characterised by increased profitability and in January 2009, Lastminute.com released nru ("near you") a GPS-based restaurant search application for Android in the UK. A US version was released in May 2009, together with restaurant review guide, Zagat.
Also in 2009, Lastminute.com was among the first online players to offer limited inventory ‘flash’ sales which it branded ‘WIGIGs’ (When It’s Gone It’s Gone). During this period the company also divested itself of its travel agent ‘bed booking bank’ for hotels, MedHotels, which it sold to Thomas Cook for an undisclosed sum. The successful leisure car rental business, Holiday Autos, remained in the portfolio.
Structurally, the business also began to look quite different through the 2006–2010 period. Its technology hosting was moved to the US, offshore technology development became prevalent through use of Sabre’s facilities in South America, North America and India and Lastminute.com itself opened a new centre in Poland to handle much of its back-office and customer fulfilment functions.
In early 2011, Lastminute.com launched a pan-European marketing campaign called ‘Stories Start Here’, to position the brand as the ultimate online leisure, entertainment and travel retailer.
More recently, the company’s communications strategy has focussed on a return to its ‘last minute’ roots, promoting the customer savings that can be achieved when booking at the last minute. A revisited focus on ‘the weekend’ has also been an important development for the company, which created a dedicated section of their website in August 2011, providing weekend-specific offers.
In a recent announcement, the company claims to sell a holiday every fifteen minutes, a theatre ticket every 26 seconds, and a spa break every three minutes.
Lastminute.com faced heavy criticisms from pressure group Plane Stupid for their advertising campaign '5 Trips a Year', a reference to the campaign in Britain calling for people to eat 5 portions of fruit and vegetables a day.
In 2009, Lastminute.com attracted much criticism on consumer sites and blogs regarding their association with highstreetmax.com, a brand owned by Adaptive Affinity, in turn owned by US corporation Vertrue. The company was accused of subjecting customers to negative option selling, whereby if they click or do not untick a certain box they find later that they were subject to unauthorised credit card withdrawals for membership schemes they did not sign up for, whose details they were not advised and whose supposed benefits they did not see. This attracted the attention of BBC Radio 4's consumer affairs programme You and Yours on 30 January 2008 and the consumer pages of the Daily Mirror in July 2008.
Lastminute.com responded to the incident by discontinuing the relationship with highstreetmax.com and saying, 'Once our customers leave our site they are given an option to sign-up for a third-party cash back programme. When they sign up within the terms and conditions it is made clear that further payments will be taken. However we have had some feedback from customers who have inadvertently signed up. On this basis we feel that it is the right thing to do to take this off our site.'
Lastminute.com's customer service is also heavily criticised for inaccuracy and provision of incorrect data.
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