Changes for garden sales on TV

Broadcaster proposes company voluntary arrangement while former supplier sets up new brand.

Home & Garden Plus: founded by McDermott (left) and Hodgson
Home & Garden Plus: founded by McDermott (left) and Hodgson

TV garden shopping is undergoing a big shake-up after Sit-Up proposed a company voluntary arrangement (CVA) and former supplier Peter McDermott set up Home & Garden Plus with teleshopping company JML.

Paul Wright and business partner Val Kaye have offered to bail out Sit-Up. They were partners with McDermott in Lead the Good Life (LTGL), which they sold to Ideal Shopping Direct in 2010.

Wright and Kaye set up what is now Ideal World/Ideal Shopping Direct in the 1980s. They left the Ideal board in 2007 after selling £9.9m of shares and retaining a 29 per cent stake. Thompson & Morgan pulled out of shopping channel QVC this year to work with Ideal Shopping Direct.

German equity fund Aurelius sold Sit-Up to Tnui Capital in December 2013. It broadcasts to more than 12 million homes. Gardening made up around £5m of its retail sales in 2013 but supplier YouGarden, which McDermott founded after LTGL, has since stopped supplying Sit-Up.

The business began in 2000 and was sold to Virgin Media for £194m before Tnui Capital bought it in late 2013. There were 250,000-300,000 gardening orders in 2013 with a retail value of about £4m-£5m. Tnui chief executive Bryan Green said the CVA "will save 350 jobs".

Will Wright, a partner at KPMG and proposed "superviser" of the CVA, added: "The restructuring entails a £6m investment from retail entrepreneurs Paul Wright and Val Kaye, which is conditional on the CVA being approved by creditors."

The company is believed to owe creditors £68m. KPMG said, depending on negotiations, the average creditor return will be between nine and 30 pence in the pound, as opposed to 1.1 pence in the pound in administration.

A creditors' meeting was due to be held at KPMG's Salisbury Square office on 18 March. The proposal will require the approval of more than 75 per cent (by value) of creditors voting.

Paul Wright's son Matt is one of the suppliers of gardening products to the company, in addition to being one of its presenters.

McDermott stopped doing business with Bid TV in autumn 2013 because of the credit risk. "It's a great shame for the sector if the business goes terminally bad," he said. "It's a worry for the consumer when any business gets into financial difficulty. I hope they resolve the situation."

He is now working with former Bid TV controller Andy Hodgson on Home & Garden Plus with JML. Hodgson said: "Having spent years presenting various TV shows, I realised that there was very little gardening content on TV. In fact, the offering was incredibly poor."

There is a Europe-wide opportunity to expand and future phases will include online, on-page and catalogues, he added. Initially, plants will be 80 per cent of the offer.

"A lot of garden centres are now reliant on diversification because of the weather," said Hodgson. "We're more accessible than centres. There's been a shake-up but the gardening TV market is by no means at saturation point."

Channel launch Extensive plans for brand

Home & Garden Plus began broadcasting with JML on Sky channel 642 on 9 March.

Former Bid TV controller of channels Andy Hodgson and Peter McDermott founded the business, and both will appear as presenters on JML and Home Garden Plus hours.

"This is just the start," they said. "We have extensive plans for the brand and plan to be the portal for the lifestyle gardeners in Europe."

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