A dotcom entrepreneur turned online jewellery retailer is poised to take control of the rival television shopping firm he once ran.

Steve Bennett’s Studley-based Colourful Company Group, where he is director alongside his brother and wife, has agreed a £3 million deal to buy Gems TV UK, another West Midland-based home shopping jewellery retailer.

The deal still needs shareholder approval to go through.

Mr Bennett was one of the original founders of Gems TV, working there as managing director before setting up rival online auction site rocks.tv and jewellery website Coloured Rocks, both of which come under the Colourful Company Group umbrella.

Mr Bennett is a well-known entrepreneur in the West Midlands who, with his brother John, founded Vinappris in 2007, the world’s first live wine television shopping channel which broadcast from a custom-built wine bar at Fort Dunlop – now off air.

The loss-making Gems TV UK specialises in selling coloured gemstone jewellery via reverse auction over the internet and on TV.

It operates from Redditch, with a parent company listed on the Singapore Stock Exchange.

Its current owner, Gems TV Holdings, said the firm was a drain on its cash resources, citing tough competition in the UK market, including competition from the Colourful Company Group’s Rocks TV, as one of the reasons to sell.

A company spokesman declined to say how many people work at Gems TV in the West Midlands.

Gems TV Holdings said in a statement to the Singapore Stock Exchange: “Since the company commenced selling jewellery via reverse auction in the UK, three new competitors now directly compete with Gems UK.

“As of the date of this announcement, Gems UK is in a loss-making position and it is draining cash resources.

“The company believes that the overall outlook for the market in the UK in the foreseeable future is poor and will remain highly competitive.”

It added that if the proposed sale does not take place, it would have to shut down its operations in the UK and liquidate its assets.

After leaving Gems TV, Steve Bennett went on to set up Colourful Company Group along with his wife Sarah Bennett, who is head designer, and his brother John Bennett.

The company sells gemstone jewellery through its Coloured Rocks website as well as running the online auction rocks.tv.

The online business takes the TV shopping format and adds internet characteristics such as forums and interactive chats with the presenter.

Mr Bennett has described the style of rocks.tv as “telly shopping 2.0”. Earlier this year, the site started to broadcast on Sky.

Steve and John Bennett have been involved in a series of ventures since the 1980s incuding focusing on mail-order markets.

As well as jungle.com, the brothers’ other companies included setting up Software Warehouse.

Mr Bennett sold jungle.com to the then-Argos owner General Universal Stores for £37 million in September 2000.

Eagle Road studios in Redditch, where Gems TV is based, began operations in 2002 with three home shopping channels, one of which – Snatch It – used the reverse auction system.

In 2004 Thai company Thaigem Holdings, previously the studios’ jewellery supplier, switched to working as partners to launch the Gems TV shopping channel.

Thaigem later merged with Eagle Road, changing its name to Gems TV Holdings – the holding company listed on the stock exchange – and Eagle Road became Gems TV.