Hopes of an 11th-hour rescue for clickmango.com, the online health and beauty products retailer, rose yesterday when the company said it would continue trading beyond its planned closure date at the end of the month.

After announcing last week that it was ceasing trading, Clickmango said the attitude of its main creditors and the loyalty of its 20 staff allowed it a stay of execution. The company said it had the resources to operate into September, giving it more time to attract for a rescue bid.

"We're feeling cautiously optimistic that an extra month of operation might give us enough time to conclude negotiations with one of the many blue-chip white knights who have made approaches this week," co-founder Robert Norton said in a written statement.

The company said traffic on the site, which was begun in April 2000, had quadrupled over the past week and sales had increased by 20%.

With investors taking a more hard-nosed view of internet stocks following the share price mania at the end of last year, Clickmango became the latest victim of the new mood when it said it was winding down its business in order to pay staff and creditors in full.

Atlas Venture, which last September provided the bulk of the £3m Clickmango needed to set up and operate for a year, decided to pull the plug at a time when prospects for e-retailers are looking exceedingly grim.

Mr Norton said the company had been unable to raise some £300,000 in bridging finance.

Clickmango's woes are the latest in a series of blows to confidence in Britain's internet sector, with business-to-consumer firms facing particular uncertainty after the collapse earlier this year of high-spending fashion retailer Boo.com.

The company hired actress Joanna Lumley, who plays Patsy Stone in television comedy Absolutely Fabulous, to endorse its site. Mr Norton founded the company with Toby Rowland, son of the late tycoon "Tiny" Rowland.