Great Universal Stores yesterday rescued Breathe.com, the internet access group that collapsed last month with debts of £50m.
The Argos stores to Reality outsourcing group said it was paying £1.4m for the assets and technology of Breathe.com but would not assume any of the company's liabilities. At its peak, Breathe was valued at around £100m.
News of GUS's move for Breathe.com came as another top UK retailer, Kingfisher, was pocketing £145m in cash and shares from the sale of its stake in French internet service provider Liberty Surf, which is being taken over by Italian group Tiscali.
GUS, which will take on 80 Breathe.com staff, said the company's skills and technology would be used to provide easier access to the GUS on-line shopping operations and to increase the services offered by its Reality arm, which provides website designs and logistical services.
GUS chief executive John Peace said: "We are very pleased to have the opportunity to use the information and technology we have acquired with Breathe.com. The company has been very advanced in developing multi-device access to the internet, with ease of use the top priority."
Breathe.com has over 300,00 registered users, and GUS said yesterday that it expected its acquisition to run up losses of between £4m and £7m in the next financial year.
Kingfisher's sale of its stake is part of a €650m (£412m) bid for Liberty Surf from Tiscali - a deal seen as part of the continuing consolidation among internet service providers in Europe around four leading players: Tiscali, France Telecom subsidiary Wanadoo, Deutsche Telekom's T-Online and Spain's Terra Lycos.
Under the terms of the deal Kingfisher and Groupe Arnault's Europ@web will each be given €2.13 and 0.365 Tiscali shares for every Liberty Surf share.
"It's been no secret that the shareholding in Liberty Surf was not be a core one in the long term. This is a good time to sell, and the price is right," said a Kingfisher spokesman.
Renato Soru, Tiscali's executive chairman, said: "Liberty Surf has been very successful in building up its market position in France and in developing its portal.
"France is a very important and fast growing market, and it is a key part of our European strategy.
Following this acquisition Tiscali will be the second largest operator in France and will further improve its position as Europe's second largest player - as well as the only one which is truly pan-European."
Liberty Surf had been reported to be considering the future of its non-French operations - including a British arm which employs more than 100 people.
