Toyzone.co.uk, the high profile toys e-tailer backed by entrepreneur Tom Hunter and TV presenter Jonathan Ross yesterday added to the carnage in the e-commerce sector by closing the business, writes John Cassy .

The 15-month-old company's decision to shut its doors came a day after the online toy sector's biggest player, eToys, filed for bankruptcy protection in the US.

"We've been out in the market for the last six months trying to raise money with no luck, and when the market leader with revenues of $160m a quarter files for bankruptcy, you realise you've absolutely no chance of getting finance," said Matthew Freud, the PR guru who co-founded Toyzone.co.uk in November 1999.

"We had a robust business model and were making money on every shopping trolley, but ultimately investors just don't have an appetite for B2C plays."

A year ago reports suggested Toyzone could be floated for £250m.

Marketing, fulfilment and technology were all outsourced, meaning there would be very few job losses, Mr Freud said.

Toyzone generated sales of around £2m. Mr Hunter, who earned the title of Scotland's second richest man after selling his Sports Division retail chain to JJB Sports, was the firm's biggest shareholder.