Home shopping business TVSN and its sister subsidiary Innovations have just launched a closing-down sale amid recent and ongoing attempts to offload the entities or secure a recapitalisation.
Direct Group, the owner of TVSN and Innovations, confirmed the news today, adding that around $30 million worth of stock, at retail value, is being offered for clearance. This includes stock from the group’s In-Fashion ranges. TVSN also sells a range of fashion, alongside leisure, beauty, electronics and outdoor.
The ‘Close Down’ sale follows the withdrawal of the company's trade credit insurance — cover that had protected suppliers against non-payment of accounts — and the subsequent decision by some suppliers to cease stock supply.
The business has also experienced cash flow pressure since its private equity owners exited.
“Due to difficult trading conditions and limited access to the funding required to support stock purchases, customer acquisition, systems and ongoing growth, we have no alternative but to close the business,” Direct Group shared in a media statement.
“At this time Direct Group will not be placing new stock orders, and we will not accept deliveries of goods unless specifically agreed in advance.
“The Closing Down Sale is intended to drive sales to allow us to reduce outstanding liabilities and support the business.”
Direct Group labelled the closing down sale as a contingency measure, not a certainty. It is being run in the event that a buyer is not secured and will be scaled back or ended immediately should one be found.
Direct Group remains hopeful that a buyer will emerge, preserving the business.
Many of the brands and product ranges offered through TVSN, Innovations and In-Fashion are exclusive to these channels and are not available elsewhere in Australia. Many others are extra channels for businesses, including fashion brands such as Philosophy Australia, Fate + Becker, Knewe Label and Sacha Drake.
Direct Group also issued a letter to suppliers, saying that it will not be placing any new stock orders, nor will it accept deliveries of goods unless specifically agreed to in advance.
The group also issued email messages to subscribers of TVSN and Innovations, saying that it had spent months seeking investment or a buyer for the business, adding that no transaction eventuated.
TVSN is the latest fashion and retail business to hit the wall, with Cue and Veronika Maine calling in the administrators last month, and the ongoing concern around David Jones following issues with supplier payments and a $150 million restructuring deal.
This also comes as the immediate future around retail spending remains challenged, with economists predicting a further lift in Australia’s official cash rate in November, which would fall in the middle of peak period.