Noon deadline for FlyingPig

By KARYN SCHERER Associate Business Editor

One of New Zealand's biggest internet retailers, FlyingPig, is fighting for its life, with its main creditor threatening to pull the plug on the service by noon today.

Christchurch-based software company EStarOnline temporarily suspended the online bookseller's service on Friday, claiming it has not yet been paid hundreds of thousands of dollars it is owed.

Although the service was restored by about 5 pm yesterday, EStar has said that it will permanently disable the site at midday unless it can strike a deal with the owners of the internet retailer.

The row has threatened the jobs of 11 staff who still work for FlyingPig, and has left hundreds of customers in the lurch.

Around 1300 customers are believed to have bought items from the site over the past month.

The internet retailer's sales are understood to have averaged around $100,000 a month.

The wrangle is the latest drama for Wilson Neill, which acquired FlyingPig last year as part of the publishing company IT Media.

Wilson Neill claimed in July that Transram Group, which was a joint venture between a Panama-based communications company and a New Zealand charitable trust, had bought just over 50 per cent of the company.

However, that deal has yet to be finalised.

EStarOnline chief executive Matthew Darby said yesterday that he was fed up with not being paid when it appeared that FlyingPig was profitable.

He said he had made what he believed was a "fair and reasonable" offer for the site.

That offer would see all creditors being paid out.

"We believe it's a very viable business. It's just been mismanaged."

IT Media managing director Tim Connell referred queries to Wilson Neill's general manager, Phil Vosper.

Mr Vosper said he hoped to work out a deal "over the next couple of days".

He was not concerned by the midday deadline.

"We've heard that before. I think we'll work something out."

Other major creditors are believed to include book information service BookData, Momentum Consulting, Roadshow Entertainment and American book distributor Baker & Taylor.

Several publishers are also believed to be owed tens of thousands of dollars.

Mr Darby said that EStar had prevented FlyingPig from taking any credit card payments since Friday.

He said the company would refund customers who had since placed orders if its demands were not met.

New Zealand's biggest bookseller, Whitcoulls, stopped filling orders for the site three months ago.

Whitcoulls' manager of information services, Tom Dunser, said yesterday that FlyingPig had been unable to adapt to a new customer ordering system.

He said Whitcoulls had previously sold a "reasonable amount" of books through the site, although the level of sales achieved did not match even the company's smallest stores.

FlyingPig was founded three years ago by former Whitcoulls head Stefan Preston and his business partner, Adam Keller.

Eric Watson's Pacific Retail Group became a major shareholder, before selling the site to IT Media a year ago.

IT Media also bought online music store CDStar from EStarOnline, but the site no longer operates.

Mr Darby claimed that EStar had killed the site after failing to receive money it was owed from IT Media for its services.