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The offices in Toronto are pictured in this file photo from May 3, 2012.Deborah Baic/The Globe and Mail

Four years ago, Toronto's Network Inc. launched with big ambitions – to create a billion-dollar e-commerce marketplace in Canada – and backed by prominent investors, including Torstar Corp., digital economy guru Don Tapscott, broadcast executive Gary Slaight and former NHL star Eric Lindros. "I think this is going to transform shopping in Canada," Mr. Tapscott said at the time.

But now, after blowing through more than $70-million in investor capital and accumulating $72-million in losses, while failing to reach $30-million in annual revenues, is in bankruptcy court, trying to sell its assets for a fraction of what the company raised.

An Ontario Superior Court judge last month gave the company until July 15 to file a sales proposal after receiving three letters of intent (LOI) from potential buyers. That follows an attempt earlier this year to sell the company, which yielded two non-binding letters that valued at between $5-million and $15-million, sources say. "They tried to sell the intellectual property but have not been successful," said David Coriat, chief financial officer of Slaight Communications and a former director. filed for creditor protection last month, when it had $1.5-million in cash on hand, saying it would otherwise run out of money before it could reach a deal. follows a recent string of other North American online merchants that have either filed for creditor protection or sold for a fraction of their former value, including Beyond the Rack, One Kings Lane, Hayneedle and Gilt Groupe. "The market has turned against money-losing e-retail properties," said Brent Holliday, CEO of Garibaldi Capital Advisors, a technology-focused boutique investment banking firm. was the brainchild of Drew Green, a former DoubleClick Inc. sales executive who believed there was opportunity to build a giant online marketplace in Canada, where e-commerce adoption lagged other developed countries. (Online sales accounted for 6 per cent of retail spending in Canada last year, compared with 9 per cent in the U.S., according to Haywood Securities Inc.) launched in mid-2012, signing up 850 retailers, and boasting more than 15 million items for sale and 4,000 brands, including Adidas, Canon, Nine West and Stanley. "Our mission revolves around changing the dynamic of e-commerce in Canada," Mr. Green said at the time.

The company's biggest backer was Torstar, which invested $6-million and pledged another $12.4-million worth of promotional support, giving it more than 20-per-cent ownership. posted $21.9-million of revenue in 2013, its first full year of operations, rising to $27.4-million in 2014.

But while spent heavily to promote its brand – through advertising, a loyalty reward program with Aeroplan and by offering customers virtual dollars toward purchases – it couldn't sustain its growth or steadily build a loyal following. Customers often only returned to take advantage of costly promotions, and offered many of the same brands sold by other retailers.

"In any industry, you have to find your niche and what you're good at," said Haywood analyst Pardeep Sangha. "But if you're just trying to be a me-too e-retailer" up against retail giants such as Amazon and Wal-Mart, "then that's going to be difficult." fell well short of gaining any benefits from scaling up in a sparsely populated, geographically dispersed market. "The cost of getting new customers is extremely high and the margins you get in products are extremely low, unless you have high volumes," said Mr. Coriat. "Unless you get the scale, you can't offset the costs."

Revenues dipped to $23.3-million last year as the company trimmed marketing and sales expenses. generated just $3.1-million in revenue this year through April, down 50 per cent year over year as operating losses mounted. By then, Mr. Green was long gone as CEO, departing in 2014. He later become CEO of British Columbia online retailer Indochino. His replacement, James Haggarty, lasted just over a year before veteran American online retailer Tony Chvala, a former Amazon executive, took over. lost close to half its employees through layoffs and attrition in the past year and now has a staff of 40. Most directors, including Mr. Coriat, quit the board in recent weeks, leaving only Mr. Green, Mr. Chvala and president and co-founder Trevor Newell. Mr. Chvala didn't return calls and Mr. Newell declined comment.

The company began looking for buyers last August, but initial expectations of selling for upwards of $100-million proved to be wildly optimistic, said one informed source. Potential bidders who looked at the company this year included Wal-Mart, Canadian Tire and Vancouver e-commerce entrepreneur Roger Hardy, sources said.