14 August 2002 Eprocurement software supplier Clarus is to close its operations in the UK and Canada as a result of plummeting revenues. The closure casts doubt on the future of the company and analyst AMR Research has warned organisations to seek assurances from Clarus before buying its products.

Once a high-flying eprocurement supplier, Clarus will close its Maidenhead, England and Toronto, Canada offices, but will continue to operate with 50 staff from its Atlanta, Georgia headquarters, as well as a small customer support unit in Limerick, Ireland.

Clarus was among the first vendors to spot the potential opportunity of the eprocurement software market. In 1999, it sold its core enterprise resource planning business to Geac Computer Systems so that it could focus solely on selling eprocurement software.

At that time, the nascent eprocurement market – led by suppliers Ariba and Commerce One – had just started to explode into life. Clarus added eprocurement products including strategic e-sourcing, online auction and private trading exchange platform software, via a combination of in-house development and acquisitions.

However, since moving into eprocurement Clarus’s sales have slumped. During 2001, Clarus’s revenues fell to $17 million (€17.2m), compared to a peak of $41.6 million (€42.1m) in 1998 – when the company was still an ERP software supplier.

But revenues in its last quarter to the end of June 2002 fell 58% to just $2.5 million (€2.5m), quarter-on-quarter. A major factor was the decision by Barclays Bank, its biggest customer, to stop using Clarus’s software, says AMR.

It also had to fight a bitter legal dispute with dissident shareholders and although it could boast cash and cash equivalents of $107.3 million (€108.5m) in the last quarter, analysts have speculated that the dissidents are now seeking the liquidation of the company and the distribution of the cash to shareholders.