Boots takes £10m hit after closing internet service for storing photos

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The Independent Online

Boots has axed the key services provided by its Bootsphoto.com website after suffering heavy losses. Bootsphoto.com was launched a year ago to let customers store digital images that they could sendvia e-mail to friends and family. Boots charged £3 to store 100 images for a year. But demand was "substantially lower than forecast" and the service will be withdrawn with immediate effect.

Boots has axed the key services provided by its Bootsphoto.com website after suffering heavy losses. Bootsphoto.com was launched a year ago to let customers store digital images that they could sendvia e-mail to friends and family. Boots charged £3 to store 100 images for a year. But demand was "substantially lower than forecast" and the service will be withdrawn with immediate effect.

Bootsphoto.com is expected to make an operating loss of £7.3m in the first six months of the financial year. Pulling the service will cost Boots an extra £10m, mainly related to contractual supply agreements.

In May, the retailer said the operating loss at the venture in the year to March was £6.5m and the total investment was £9.1m. The company said the website would continue to offer advice and features on photography. It will be relaunched early next year, offering digital services such as editing and printing. No jobs are affected.

Boots declined to comment on whether it would make cuts at its other web activities. These include its wellbeing.com joint venture with Granada and handbag.com, a women's portal. Rival retailers have taken the axe to their internet operations. In the summer, J Sainsbury and Carlton unwound Taste, their digital television operation.

Last year, Boots' internet ventures recorded sales of just £1.9m and operating losses of £22m. Boots shares closed up 0.5p at 640p. HSBC upgraded its recommendation to "buy" from "add" yesterday, with a target price of 800p. Boots' interim results are due on 8 November.

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