Lastminute.com

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lastminute.com
Foundation date April 1998 (1998-04)
Headquarters London, UK
Founder(s) Martha Lane Fox and Brent Hoberman
Key people Matthew Crummack, Chief Executive Officer
Mark Maddock, Managing Director UK & Ireland
Industry Travel
Parent Sabre Holdings
Website lastminute.com
Alexa rank 1,668 (as of October 2011)[1]
Launched October 1998
Current status Trading

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

Lastminute.com was founded in London by Martha Lane Fox and Brent Hoberman in 1998 to offer late holiday deals online. The founders were colleagues at media strategy consultants Spectrum.[2]

By January 2000, Lastminute.com had more than 500,000 regular users[3] and its offering had expanded to include travel, gifts and entertainment.[2] The company specialises in selling distressed inventory.[4]

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.[2] In the ten months ending December 1999, the company handled £37m of transactions, which generated £330,000 of income.[5]

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.[6] The paper wealth of the founders of the business went up to around £300m.[7]

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.[7]

Public listed company: March 2000 to May 2005

Lastminute.com share price (14 March 2000 through 14 March 2001)

Within two weeks of listing, the share price had dropped to 270p.[8] In the first week of April, the shares dipped below 190p, half the issue price.[9] On Monday, 17 April 2000, after the biggest ever one-day fall in the New York stock market on the preceding Friday,[10] £35bn were wiped off the value of the London Stock Exchange. By now, Lastminute.com was trading at 30% of its flotation price.[11]

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.[12] Two weeks later, however, the shares closed at 141p, as concerns over dotcom stocks increased, when boo.com went into liquidation.[13]

The introduction of a new website – allowing late deals to be targeted according to users' personal tastes – was delayed[14] but finally unveiled on 27 November 2000.[15]

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.[16]

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.[17]

Lastminute.com shares sank below 100p for the first time on 8 November and closed at 80p on 10 November.[18]

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.[19]

In November 2001 the company reported a £54m loss.[20]

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.[20]

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.[21]

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.[22]

Brent Hoberman stayed with the business until spring 2006 when he handed over the reigns as CEO to Ian McCaig.[23]

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),[24] Damon Tassone, Josh Feuerstein (who are now co-founders at Intent Media)[25] and Arun Rajan (now CTO at Zappos).[26]

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),[27] Joe Kenny from Cisco[28] and Arnaldo Munoz from easyJet.[29]

During 2008–2010, hires included Alistair Rodger (formerly Commercial Director at Hilton)[30] and James Donaldson (who joined from News International to replace Kamm as CFO)[31] and Mark Newton from AMEX.[32]

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.[33] A US version was released in May 2009, together with restaurant review guide, Zagat.[34]

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).[35] 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.[36] 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.[37]

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.[38]

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.[39] 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.[40]

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.[41]

Criticisms

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.[42][citation needed]

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.[43]

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.'[44]

Customer service

Lastminute.com's customer service is heavily criticised for inaccuracy and provision of incorrect data – their overall experience is rated 6.2/10.[45]

References

  1. ↑ "Statistics Summary for lastminute.com". Alexa. Retrieved 21 October 2011. 
  2. ↑ 2.0 2.1 2.2 Cassy, John (14 January 2000). "Partners push Lastminute.com value to £700m". The Guardian (London). Retrieved 23 July 2010. 
  3. ↑ Vamvas, Eve (10 January 2000). "Fixing it at the lastminute". The Guardian (London). Retrieved 23 July 2010. 
  4. ↑ Keegan, Victor (27 January 2000). "We've only just begun". The Guardian (London). Retrieved 23 July 2010. 
  5. ↑ Farrelly, Paul (20 February 2000). "Stockwatch". The Observer (London). Retrieved 23 July 2010. 
  6. ↑ Jeffery, Simon (14 March 1998). "Lastminute flotation soars ahead". The Guardian (London). Retrieved 1 May 2010. 
  7. ↑ 7.0 7.1 Murphy, Paul (14 March 2000). "Business as usual". The Guardian (London). Retrieved 23 July 2010. 
  8. ↑ Doward, Jamie (26 March 2000). "Lastminute: the first flaw nerves prevail". The Observer (London). Retrieved 24 July 2010. 
  9. ↑ Bell, Emily (9 April 2000). "No regrets as hi-tech balloon goes pop". The Observer (London). Retrieved 24 July 2010. 
  10. ↑ Farrelly, Paul (16 April 2000). "City set for the big bust". The Observer (London). Retrieved 24 July 2010. 
  11. ↑ McCurry, Justin; Martinson, Jane; Treanor, Jill; Elliott, Larry (18 April 2000). "London survives market nerves as technology stocks fall further". The Guardian (London). Retrieved 24 July 2010. 
  12. ↑ Cassy, John (5 May 2000). "Lastminute maiden results surprise sceptics". The Guardian (London). Retrieved 26 July 2010. 
  13. ↑ Elliott, Larry (20 May 2000). "Panic selling of hi-tech stocks follows crash of Boo.com". The Guardian (London). Retrieved 26 July 2010. 
  14. ↑ Cassy, John (4 August 2000). "Fears over relaunch dismissed". The Guardian (London). Retrieved 26 July 2010. 
  15. ↑ "Lastminute unveils upgraded service". MediaGuardian (London). 27 November 2000. Retrieved 26 July 2010. 
  16. ↑ Bell, Emily (14 August 2000). "Lastminute.com acquires France's Degriftour for £58.9m". The Guardian (London). Press Association. Retrieved 26 July 2010. 
  17. ↑ Cassy, John (12 October 2000). "Leighton joins Lastminute". The Guardian (London). Retrieved 26 July 2010. 
  18. ↑ Bowers, Simon (11 November 2000). "Lastminute plunges". The Guardian (London). Retrieved 26 July 2010. 
  19. ↑ Cassy, John (5 December 2000). "Lastminute says patience will pay dividends". The Guardian (London). Retrieved 26 July 2010. 
  20. ↑ 20.0 20.1 Vaughan-Adams, Liz; Verkaik, Robert (21 November 2003). "Founder Lane Fox calls it quits as lastminute turns in its first profit". The Independent (London). 
  21. ↑ Pesola, Maija (11 May 2005). "Sabre agrees to buy Lastminute for £577m". Financial Times. Retrieved 21 July 2010. 
  22. ↑ Denning, Liam (11 February 05). "Lastminute losses increase despite rise in bookings". Financial Times. Retrieved 21 July 2010. 
  23. ↑ "where we started". Lastminute.com. Retrieved 8 January 2013. 
  24. ↑ "Lastminute.com Press Office". Lastminute.com. Retrieved 21 October 2012. 
  25. ↑ "Intent Media". Intentmedia.com. Retrieved 21 October 2012. 
  26. ↑ "LinkedIn". Linkedin.com. Retrieved 21 October 2012. 
  27. ↑ "Simon Thompson". Linkedin.com. Retrieved 8 January 2013. 
  28. ↑ "Joe Kenny". Linkedin.com. Retrieved 8 January 2013. 
  29. ↑ "Arnaldo Muñoz, nuevo director general de Lastminute.com para el Sur de Europa". Cotizalia.com. Retrieved 8 January 2013. 
  30. ↑ "Alistair Rodger". Linkedin.com. Retrieved 8 January 2013. 
  31. ↑ "James Donaldson". Linkedin.com. Retrieved 8 January 2013. 
  32. ↑ "Lastminute.com appoints marketing director following Thompson's exit". travolution.co.uk. 29 August 2009. Retrieved 10 November 2011. 
  33. ↑ Fermoso, Jose (11 February 2009). "Compass and Camera Used in Innovative Location-based Apps for G1". Wired. 
  34. ↑ "Zagat Survey and Lastminute.com launch NRU a free mobile application for Google Android". Zagat.com. 27 May 2009. 
  35. ↑ "When It's Gone It's Gone". Comparecarhire.co.uk. Retrieved 21 October 2012. 
  36. ↑ "Thomas Cook Group buys Med Hotels". Travel Weekly. Travelweekly.co.uk. Retrieved 8 January 2013. 
  37. ↑ "Poland Jobs". Polandjobs77.com. Retrieved 21 October 2012. 
  38. ↑ "Lastminute.com announces exciting chapter". Lastminute.com. Retrieved 21 October 2012. 
  39. ↑ "Booking Window Opportunity". Lastminute.com. Retrieved 21 October 2012. 
  40. ↑ "Weekend Break Browser". Lastminute.com. Retrieved 21 October 2012. 
  41. ↑ "About Us". Lastminute.com. Retrieved 21 October 2012. 
  42. ↑ "Climate activist 'glued to door' of Lastminute.com". Planestupid.com. 9 September 2007. Retrieved 15 May 2011. 
  43. ↑ "Mysterious Credit Card Charges". Daily Mirror. Retrieved 21 October 2012. 
  44. ↑ "Online Shopping Firm Highstree". Daily Mirror. Retrieved 21 October 2012. 
  45. ↑ "Experience Rating". Lastminute.com. Retrieved 21 October 2012. 

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