Nexia Holdings, Inc. (OTCBB: NXHL) wholly owned subsidiary Gold Fusion Laboratories, Inc. (GFL) announced today that it will be closing two of its underperforming Black Chandelier retail stores. GFL has decided to close its Fashion Place and Shops at Riverwood locations, which were the newest out of a total of four stores. GFL has been unable to raise sufficient capital to properly merchandise all of its locations, which has undermined recent sales results. Nexia plans to reduce its retail sales force by approximately 20 persons. Black Chandelier plans to consolidate product density from its closed stores to its two remaining retail outlets, while saving an estimated $50,000 in negative cash flow per month.
Nexia has been attempting to raise up to $10 million in an equity line of credit and has been unable to get the registration statement cleared through the Securities and Exchange Commission for over 20 months. Management did not originally expect the comment process to take longer than six (6) months. The accompanying expenses related to filing the SB-2 registration statement and amendment have resulted in longer than expected SEC reviews and a subsequent change in Nexia’s outside auditing firms. Richard D. Surber, CEO of Nexia Holdings, stated, “If Nexia had been able to raise funds through the equity line of credit, we would have been able to build up the inventories at our newest two stores, which would have better positioned us to weather the ongoing economic downturn.”
Surber said, “My vision for Black Chandelier is of international proportions. We plan to pursue sales in more favorable regions in the U.S., as well as target rapidly growing economies outside of the United States. I believe that we can get our Black Chandelier retailer back on track once we are able to raise the necessary capital to push forward. We have to remain in the game until we do so. While it is difficult to close two stores, it is a necessary step for our continued development.”
Nexia intends to see the offering document through to completion. “When the registration statement clears comments and Nexia is able to raise sufficient capital, we plan to use those funds to open stores in places such as Southern California that has a consumer demographic that may be more receptive to our products. In the interim, GFL intends to boost its efforts to increase online sales through its Black Chandelier web site and increase sales at its remaining stores,” added Surber.
About Nexia Holdings
Nexia Holdings Inc. (OTCBB:NXHL), headquartered in Salt Lake City, Utah, is a diversified holdings company with operations in health & beauty, fashion retail and real estate. The Company has been acquiring undervalued properties in the Salt Lake City area since the early 1990s. Nexia owns a majority interest in Landis Lifestyle Salon, http://www.landissalon.com, a hair salon built around the world-class AVEDA(TM) product line. Through its Gold Fusion Laboratories subsidiary, Nexia owns the innovative retail and design firm Black Chandelier and its related brands. Black Chandelier has plans to expand nationwide. Our online store can be viewed at http://www.blackchandelier.com.