Lastminute.com
Encyclopedia
lastminute.com is an online travel
and leisure
retailer. The company was founded by Martha Lane Fox
and Brent Hoberman
in 1998 and became an icon of the UK internet boom of the late 1990s, floating at the peak of the dot com bubble and trading on the London Stock Exchange
under the symbol 'LMC'.
and Brent Hoberman
in 1998 to offer late holiday deals online. The founders were colleagues at media strategy consultants Spectrum.
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.
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.
The introduction of a new website - allowing late deals to be targeted according to users' personal tastes - was delayed but finally unveiled on 27 November 2000.
Meanwhile, on 14 August, lastminute.com announced the acquisition of Degriftour, a French online travel agent, for £27.1m cash and 19.7m new shares, worth 162p each at the previous day's close.
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 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.
The team was further increased by the arrival of 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 the 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 characterized by increased profitability and a more focused portfolio. At one point following all its acquisitions, lastminute.com was running more than 25 brands across Europe and this was narrowed considerably between 2006 and 2009 through both divestment and streamlining. The company focused its ‘Lifestyle’ portfolio and also grew its hotel booking business, with particular success in its ‘Top Secret Hotels’ franchise, with the company introducing the concept of opaque hotel booking offers to the travel industry.
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.
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.
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 veg a day.
In 2008, 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.'
Travel
Travel is the movement of people or objects between relatively distant geographical locations. 'Travel' can also include relatively short stays between successive movements.-Etymology:...
and leisure
Leisure
Leisure, or free time, is time spent away from business, work, and domestic chores. It is also the periods of time before or after necessary activities such as eating, sleeping and, where it is compulsory, education....
retailer. The company was founded by Martha Lane Fox
Martha Lane Fox
Martha Lane Fox is an English businesswoman and charity trustee, who has been engaged as a public servant chairperson on various e-commerce projects and investigations...
and Brent Hoberman
Brent Hoberman
Brent Hoberman, together with Martha Lane Fox, founded Lastminute.com in 1998, an online travel and gift business that floated at the peak of the dot-com bubble and managed to survive the subsequent burst of the bubble....
in 1998 and became an icon of the UK internet boom of the late 1990s, floating at the peak of the dot com bubble and trading on the London Stock Exchange
London Stock Exchange
The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...
under the symbol 'LMC'.
From foundation to flotation: April 1998 to March 2000
lastminute.com was founded in London by Martha Lane FoxMartha Lane Fox
Martha Lane Fox is an English businesswoman and charity trustee, who has been engaged as a public servant chairperson on various e-commerce projects and investigations...
and Brent Hoberman
Brent Hoberman
Brent Hoberman, together with Martha Lane Fox, founded Lastminute.com in 1998, an online travel and gift business that floated at the peak of the dot-com bubble and managed to survive the subsequent burst of the bubble....
in 1998 to offer late holiday deals online. The founders were colleagues at media strategy consultants Spectrum.
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
Paper wealth
Paper wealth means wealth as measured by monetary value, as reflected in the price of assets – how much money one's assets could be sold for. Paper wealth is contrasted with real wealth, which refers to one's actual physical assets....
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
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
Boo.com
Boo.com was a British Internet company, founded by Swedes Ernst Malmsten, Kajsa Leander and Patrik Hedelin, which went bust following the dot-com boom of the late 1990s....
went into liquidation.
The introduction of a new website - allowing late deals to be targeted according to users' personal tastes - was delayed but finally unveiled on 27 November 2000.
Meanwhile, on 14 August, lastminute.com announced the acquisition of Degriftour, a French online travel agent, for £27.1m cash and 19.7m new shares, worth 162p each at the previous day's close.
Allan Leighton
Allan Leighton
Allan Leighton is an English businessman, former CEO of Asda and former non-executive Chairman of the Royal Mail.-Biography:Born in Hereford, the son of a Co-op stores manager, he was raised in Oxford...
, the former head of Asda
Asda
Asda Stores Ltd is a British supermarket chain which retails food, clothing, general merchandise, toys and financial services. It also has a mobile telephone network, , Asda Mobile...
and president of the European division of Wal-Mart
Wal-Mart
Wal-Mart Stores, Inc. , branded as Walmart since 2008 and Wal-Mart before then, is an American public multinational corporation that runs chains of large discount department stores and warehouse stores. The company is the world's 18th largest public corporation, according to the Forbes Global 2000...
, 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 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
Sabre Holdings
Sabre Holdings or Sabre, Inc. is an American privately held travel technology company, encompassing several brands in three global distribution system channels: travel agency, airline, and direct to consumer. These areas are serviced by TSG's three main business groups...
, owner of online travel company Travelocity
Travelocity
Travelocity is an online travel agency and wholly owned subsidiary of Sabre Holdings Corporation, which was a publicly traded company until taken private by Silver Lake Partners and Texas Pacific Group in March 2007...
, 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.
Post-acquisition
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 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 the 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 characterized by increased profitability and a more focused portfolio. At one point following all its acquisitions, lastminute.com was running more than 25 brands across Europe and this was narrowed considerably between 2006 and 2009 through both divestment and streamlining. The company focused its ‘Lifestyle’ portfolio and also grew its hotel booking business, with particular success in its ‘Top Secret Hotels’ franchise, with the company introducing the concept of opaque hotel booking offers to the travel industry.
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
South America
South America is a continent situated in the Western Hemisphere, mostly in the Southern Hemisphere, with a relatively small portion in the Northern Hemisphere. The continent is also considered a subcontinent of the Americas. It is bordered on the west by the Pacific Ocean and on the north and east...
, North America
North America
North America is a continent wholly within the Northern Hemisphere and almost wholly within the Western Hemisphere. It is also considered a northern subcontinent of the Americas...
and India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
and lastminute.com itself opened a new centre in Poland to handle much of its back-office and customer fulfilment functions.
Recent developments
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.
Criticisms
lastminute.com faced heavy criticisms from pressure group Plane StupidPlane Stupid
Plane Stupid is a UK-focused group of environmental protesters who state their aim as wanting to see an end to airport expansion for what it sees as "unnecessary and unsustainable" flights. The organisation has no formal hierarchy, leader, or media figurehead. It is a loose association of...
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 veg a day.
In 2008, 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
Vertrue
Vertrue Incorporated, headquartered in Norwalk, CT, is a consumer services marketing company. The company again received an "F" from the Better Business Bureau for making unauthorized charges to its customers' credit cards...
. 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
You and Yours
You and Yours is a British radio consumer affairs programme, broadcast on BBC Radio 4.-History:It began broadcasting in October 1970, its first presenter was Joan York. In the great rescheduling of April 1998 it was increased from a 25 minute programme to 55 minutes. In the 1980s it briefly ran...
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.'