US arm of TV shopping business to close after profits take a hit.
TV shopping channel Gems TV is pulling out of the US market due to the “challenging economic environment” and the inflated gold price.
The board of Gems TV Holdings has announced today that it will cease operations of its wholly owned subsidiary Gems TV USA, which it launched in November 2006. The company said that profits at the US arm of the business were hit after tough trading conditions and the rising gold price damaged its margins.
In a statement, Gems TV said: “The rationale for such cessation is due to Gems USA having been unable to achieve sufficient operational and economic scale in the US market due to the challenging economic environment for the duration of its operations.”
Gems TV is now weighing up its exit options and will base its strategy on getting maximum value for its shareholders. The board of directors said that possible options could be the voluntary winding-up of Gems USA or a sale of its assets.
Gems TV said that it is too early to comment on the effect of the closure of Gems TV USA on net tangible assets and earnings per share of the company and its subsidiaries, as the nature of the exit strategy will directly affect this.
There was no one available from Gems TV UK to comment on the implications of the closure for the UK arm of the business.