Archive for February, 2016

QVC Honcho Promises New Designer Jewelry In 2016

February 28, 2016

Who loves you, baby? What other nut would be blogging about home shopping on a Saturday night?

We took a gander at the transcript of the fourth-quarter conference call that QVC’s parent, Liberty Interactive, held Friday. There must a couple of interesting tidbits, including some new jewelry “designer brands” coming to QVC. Do tell!

Here are some of QVC CEO Mike George’s comments, from the Seeking Alpha transcript.

http://seekingalpha.com/article/3936306-liberty-interactive-qvca-gregory-b-maffei-q4-2015-results-earnings-call-transcript

We continue to see strength in our fashion, home décor and fitness businesses in the U.S. In fashion, we had great success with proprietary designer brands such as Lori Goldstein and Isaac Mizrahi Live! We also experienced strong performance in accessories driven especially by designer footwear, and we’re seeing great strength in the fitness wearables category with Garmin and Fitbit.

Consumer electronics was up slightly with the rebound in computers, audio and cameras, and we sold a lot of drones and introduced new brands like GoPro, Amazon Echo and Microsoft Surface. That said, we do remain highly cautious about the long-term outlook for the consumer electronics category.

Jewelry continued to be soft due to weakness in our gold business. We’re refocusing our assets into better performing categories such as private label Diamonique and Affinity and we’ll be adding a number of new designer brands in 2016.

What else is up for this year?

I think as we look at 2016, I think what we’re mostly encouraged by is – and this was kind of a trend in 2015 that I think continues is a fairly broad based health across the categories.

And so, we’re not – we don’t feel like we’re overly dependent on one or two categories to drive growth, and I think we can have a fairly balanced profile. The two ‘watch-outs’ continue to be jewelry and consumer electronics.

We are working hard to try to turn the jewelry business. I don’t know that we’ve cracked the code yet, but we’ve got a number of new designers we’re introducing as well as sort of a step up in our proprietary brand.

QVC’s Revenue Rises 3 Percent, To $2.1 Billion, In 4Q

February 26, 2016

QVC fared better than rival HSN in the fourth quarter, posting a 3 percent increase in revenue to $2.1 billion, its parent Liberty Interactive Corp. reported on Friday. For the year, revenue rose 3 percent to $6.3 billion.

Those earnings compared to HSN’s results, reported earlier this week, of its net sales sliding 2 percent in the fourth-quarter last year, to $778.7 million, versus the year-ago period. And revenue rose 3 percent for 2015, to $2.5 billion.

Domestic QVC saw growth in all categories except jewelry (damn).

Units sold increased 4 percent, while the average selling price per unit (“ASP”) increased slightly to $61.89 and returns as a percentage of gross product revenue improved 98 basis points in the quarter.

For the year, the U.S. home shopping network saw gains in all categories except jewelry and electronics.

Units sold increased 4 percent, ASP increased 1 percent to $60.32, and the return rate improved 11 basis points for the full year.

E-commerce revenue increased 13 percent to $1.1 billion and rose to 52 percent from 48 percent of total U.S. revenue in the quarter. For the year, e-commerce revenue increased 12 percent to $3.1 billion and increased 49 percent from 45 percent of total U.S. revenue.

In the quarter, adjusted OIBDA increased 1% to $479 million, and adjusted OIBDA margin decreased 42 basis points. US margin performance primarily reflects lower shipping and handling revenue due to our reduced S&H fees and higher warehouse costs, which were partially offset by improved initial product margins and lower personnel and inventory obsolescence expense.

Additionally, we incurred $3 million of restructuring costs related to establishing a global business services center. Excluding this expense, adjusted OIBDA would have increased 2 percent for the fourth quarter.

For the year, adjusted OIBDA rose 3 percent to $1.5 billion, and adjusted OIBDA margin declined 15 basis points, primarily due to lower shipping and handling revenue, higher obsolescence, freight, personnel and warehouse costs, which were partially offset by improved credit card income, higher initial product margins and lower marketing expenses.

QVC President and CEO Mike George had this canned statement, where he referenced the company’s plans to move some operations to Krakow, Poland:

https://homeshoppingista.wordpress.com/2016/02/20/qvc-to-lay-off-220-import-jobs-to-krakow/

We entered 2016 from a position of strength. Our fourth-quarter results demonstrate the stability of our model, which distinguishes us from other retailers in this volatile environment.

In 2015, we created a stronger foundation for long-term success and industry leadership. We formed a new global structure to leverage the best of QVC worldwide.

We extended the reach and enhanced the capabilities of our digital commerce platforms. We entered our seventh market with the launch of QVC France. We delivered broad-based, local currency revenue growth, and with the addition of zulily, we expanded our reach to millennial shoppers.

We are excited to have created a new global organizational structure in 2015. As part of this new structure, we created an international division and we have aligned our reporting accordingly. As you can see, QVC now reports results as QVC US and QVC International.

QVC’s newly revised organizational structure is intended to allow the company to better leverage its global scale and capabilities, which is expected to enhance QVC’s competitive position and create operational efficiencies.

Going forward QVC’s public financial disclosure will mimic this operating structure. Management believes it is appropriate to provide public investors with financial disclosure that is consistent with the way the company evaluates its business performance and manages its operations.

LIberty Interactive President and CEO Greg Maffei gave QVC a shout-out.

“QVC generated another quarter of solid revenue growth, particularly QVC U.S., which we view as very strong given the backdrop of a soft U.S. retail environment,” he said.

C. Wonder Premieres On QVC March 3

February 25, 2016

This deal was previously announced, but here are details about the debut of C. Wonder on QVC.

By the way, C. Wonder is owned by Xcel Brands Inc., which also owns and manages the Isaac Mizrahi, Judith Ripka and H Halston brands, which are QVC mainstays.

SOMETHING WONDERFUL IS COMING TO QVC

C. Wonder debuts an exclusive collection for QVC scheduled March 3

WEST CHESTER, Pa. (February 24, 2016) — QVC just got a little more wonderful. Beloved brand C. Wonder, owned by Xcel Brands, Inc., is scheduled to launch on Thursday, March 3 at 11AM (ET) with an exclusive collection created especially for QVC, the world’s leading video and ecommerce retailer.

The line features a collection of beautiful, spirited women’s clothing, accessories and jewelry designed to transport shoppers to a place they’ve never been. Lifestyle expert, fashion stylist to the stars and panelist on the E! hit show Fashion Police, Brad Goreski lends his expertise as Creative Director for the brand.

The C. Wonder collection, which is inspired by the exploration of global travel, possesses a sophisticated preppy-chic aesthetic embodied with a modern worldly spirit. Ranging in price from $26 to $236, the line of classic pieces with a fresh spin includes a variety of apparel, bags, belts, shoes, scarves and jewelry — all of which feature luxurious details such as tassels, bright colors, bohemian prints and patterns and more.

“C. Wonder was celebrated for its design aesthetic of easy and covetable on-trend pieces that are iconic yet fashionable,” said Rachel Ungaro, Vice President, Fashion and Beauty Merchandising, QVC. “We are excited to bring this beloved brand to QVC and provide shoppers with an opportunity to discover C. Wonder. Brad’s fashion and lifestyle expertise will shine through as he showcases the collection and shares styling tips on how to incorporate the products into an everyday wardrobe.”

Founded in 2011, C. Wonder was initially imagined as a retail store that offered a magical customer experience with a selection of new and unexpected products that would surprise and delight anyone who walked inside. As C. Wonder arrives on QVC, the brand mirrors the excitement and whimsy of the store experience, while offering amazing products at great prices.

“I can’t wait to share my fashion knowledge and bring this renowned brand to QVC,” said Goreski. “I’m thrilled to have the opportunity to showcase a new C. Wonder collection to loyal customers, while introducing the beautiful product to those new to the brand.”

Finance Whiz Suze Orman Joins HSN From QVC

February 25, 2016

HSN is getting yet another vendor from QVC: Suze Orman.

Orman has been a fixture on QVC for as long as we can remember, so this is a big move.

HSN CEO Mindy Grossman let the cat out of the bag during a fourth-quarter earnings call with analysts on Wednesday.

She said that the No. 2 home shopping network was “excited about the premier of personal financial guru, Suze Orman, selling the complexities of financial planning as we reinforce HSN as a destination for our customers who trust us to provide value-added services that will be beneficial to them.”

Last we heard, Orman was a Jersey girl like us, living with her girlfriend in Morris County, where we grew up. We believe that she resides in Chester.

We fear that if Orman got a gander at our personal finances, she’d faint.

HSN’s Sales Dip 2 Percent In Fourth Quarter

February 25, 2016

HSN’s net sales slid 2 percent in the fourth-quarter last year, to $778.7 million, versus the year-ago period. And revenue rose 3 percent for 2015, to $2.5 billion, the No. 2 home shopping network reported on Wednesday.

The channel’s operating income dropped 7 percent in the fourth quarter, to $89 million. And for all 2015, operating income was up a slight 1 percent, to $253,6 million.

HSN pointed out that these comparisons were against the prior year’s fourth quarter and full-year results, when net sales, gross profit and operating income was favorably impacted by $5 million of breakage (the reversal of certain customer credits) income.

In the fourth quarter HSN’s sales increased in electronics, wellness and home, offset by decreases in other categories.

“Our improvement in home was driven by the wholesale expansion of our Ingenious Designs business associated with the Joy Mangano brand into other retail outlets,” HSN Chief Financial Officer Judy Schmeling said during a conference call, according to a transcript from Seeking Alpha.

http://seekingalpha.com/article/3926646-hsn-hsni-mindy-grossman-q4-2015-results-earnings-call-transcript?part=single

The return rate improved 30 basis points to 16.3 percent, while units shipped increased 2 percent and the average price point decreased 5 percent primarily due to changes in product mix.

Digital sales grew 1 percent with penetration increasing 100 basis points to 43.3 percent.

Gross profit decreased 4 percent in the quarter and the gross profit rate decreased 50 basis points to 32.4 percent, primarily due to the impact of recognizing the $5 million of breakage income in the prior year.

Excluding the impact of this item, the gross profit rate decreased 10 basis points largely the result of higher shipping promotions, offset by higher product margins driven by lower clearance activity and changes in product mix.

Operating expenses (excluding non-cash charges and reorganization severance costs) decreased 4 percent to $150.8 million and were 19.4 percent as a percentage of net sales compared to 19.7 percent in the prior year. The decrease was primarily due to lower compensation.

Adjusted EBITDA increased 1 percent to $101.4 million. Operating income decreased 7 percent to $89.0 million primarily due to the $5 million of breakage income recognized in the prior year.

The closing of a distribution center cost HSN $2 million in severance costs, with 70 jobs eliminated, according to Schmeling.

Here are some of Grossman’s remarks from the call:

Sales were up in our overall home business, driven by our expanded retail footprint with our Ingenious Designs products from the Joy Mangano brand. This retail rollout was strategically executed to coincide with the premiere of the Joy movie, which opened in theaters on Christmas Day.

The products, which leverage Joy Mangano’s broad customer appeal, are now available at Target, Bed Bath & Beyond, The Container Store, and Macy’s, and we’re pleased with the initial response.

Incidentally, Jennifer Lawrence won a Golden Globe for Best Actress for her performance in the movie and has been nominated for an Oscar. We’re capitalized on the increased national exposure for the brand, including appearances for Joy on Good Morning America, CBS Sunday Morning, as well as cover stories in Good Housekeeping and People, among others.

In other areas within home, warmer weather unfavorably impacted demand for climate-related products, such as heaters, flannel bedding, and fireplaces. We’re also repositioning some categories within home, particularly floor care to induce newness and differentiated products at an accelerated pace.

We had sequential improvement in our jewelry business, particularly in productivity and profitability, as we reassert our authority in this category. Although sales in jewelry were down in the quarter, primarily driven by reduced air time as we rebuilt the business, but we’re encouraged by the strong launches of both our fine jewelry and elevated fashion collection.

In fine jewelry, we launched Diamond Couture and Diamonds Unleashed by Kara Ross, and in fashion jewelry, Kristin Chenoweth and jewels by Jennifer Miller. As I’ve mentioned before, we are optimistic about this business going forward. We have a distinct delineation between brands and are building upon these and other new launches.

In apparel and accessories, our Buy Now Wear Now strategy contributed to the category’s most recent success. Our spring fashion series, which just launched emphasizes Layer Now Lighten Later, providing us with more flexibility to manage unpredictable weather patterns, while still offering new fresh items and colors into our assortment. Premieres will include Sperry, Harve Benard, Tiki and Jay Godfrey, and an exclusive handbag collection from Vince Camuto.

HSN and Cornerstone are both part of HSN Inc. In the fourth quarter, HSN Inc.’s net sales were down 2 percent, to $1.1 billion. For the year, they increased 3 percent, to $3.7 billion.

Last year, the company racked up severance costs stemming from a reorganization and planned closing of a distribution center.

“We have made progress in certain key areas, including optimizing our sophisticated digital platforms,” Grossman said in the earnings press release. “For the first time, HSNi’s digital penetration exceeded half our sales at 52 percent, with digital reaching nearly $2 billion in annual sales. Additionally, mobile now represents nearly 40 percent of total digital sales.”

“Recognizing the continued volatility in the retail environment, we remain focused on execution, working cross-functionally across the organization to drive growth,” Grossman said.

“We will continue to extend our reach to leverage our vast content across traditional and alternative platforms, curate differentiated products and experiences, build communities with customers and provide a frictionless and seamless commerce experience.”

Evine Live’s Ex-CEO Lands $1.2 Million Severance

February 24, 2016

Don’t shed any tears over Mark Bozek and Russell Nuce, the Evine Live honchos who were recently ousted from the home shopping network. They have landed quite nicely with their golden parachutes.

Evine Live disclosed the severance packages that Bozek, the company’s former CEO, and Nuce, the ex-EVP and chief strategy officer, are getting in a filing with the Securities and Exchange Commission on Tuesday.

http://hsprod.investis.com/site/irwizard/vvtv/ir.jsp?page=sec_item_new&ipage=10764849&DSEQ=&SEQ=&SQDESC=

In round numbers, Bozek’s severance – which we don’t believe includes stock options – is $1.2 million.

That breaks down to $937,500, or 1.5 times his annual base salary, as well a severance bonus of $286,000, which is equal to 1.5 times times his annual bonus over the two fiscal years preceding the year of his resignation.

As a condition of his severance, Bozek agreed to: a confidentiality provision; a 2-year non-solicitation of vendors and a one-year non-solicitation of employees; an 18-month non-compete clause: and a mutual non-disparagement agreement.

In other words, Bozek won’t bad mouth Evine Live and it won’t bad mouth him.

Bozek’s lieutenant, Nuce, didn’t do too bad, either, getting a $600,000 parachute.

He will receive $375,000, or his annual base salary, as well as a $225,000 severance bonus, his target annual incentive bonus.

QVC To Lay Off 220, Import Jobs To Krakow

February 20, 2016

QVC isn’t making any friends with its news that it is laying off 220 employees, including 100 at its West Chester HQ, as it sends some jobs overseas to Krakow, Poland, of all places.

Philadelphia Magazine is one of the news outlets that reported the sad news out of the No. 1 home shopping network. QVC is moving parts of its HR, IT finance and legal departments to Poland, the story says.

http://www.bizjournals.com/philadelphia/morning_roundup/2016/02/west-chester-qvc-laying-off-100-job-cuts-poland.html

In addition to the pink slips in the U.S., 40 people are losing their jobs in Great Britain, 10 in Italy and 70 in Germany, according to the report. A QVC honcho broke the news to HQ workers, including some who have been with the channel since its beginning in the late 1980s, on Wednesday.

But the ax won’t be falling until 10 months. QVC gave the magazine a statement.

“The global business services model is part of QVC’s long-term strategy to continue modernizing how we operate as a global entity,” the home shopping network said. “It will provide more efficient and streamlined business services in order for QVC to stay competitive and continue expanding globally.”

“Many of the world’s largest companies have a global business services organization in Poland,” according to QVC. “Leveraging the country’s high-quality business environment, workforce with multi-lingual capabilities, and lower cost which enable seamless support for the U.S. and Europe.”

Last year QVC canned about 150 warehouse workers when it closes a facility in Florence, S.C.

The comments on the article skewered the home shopping network:

Translation. QVC’s board of directors want to earn more and the only way to accomplish this without reducing shareholder value is to terminate members of their US workforce. This is not America. This needs to be illegal and if not illegal, it should be extremely tax adverse to any company that does this. It’s a disgrace.

Come on guys-they only made $8.8 Billion last year. Gotta cut costs or the whole ship will sink! Good to see that people are outraged here. Truth is QVC is a totally greedy and unethical company that hates its long term employees. I worked there for 23 years and was an exemplary worker.
Then out of the blue, here comes a completely false negative performance review from the new boss and I got the choice between taking a job that paid half as much or get let go. My heart goes out to everyone who’s losing their jobs in their late 40s or 50s–good luck getting an interview let alone a job offer. Thanks for ending my career QVC-BOYCOTT THEM!!

I work for this company. They don’t give a damned about us, more for less is the attitude. Worthless employees get all the praise while the ones that do work repeatedly get coached or wrote up.Screw the “Q”, looking forward to retirement.

QVC is a dirty company. Of course they lay off these employees when they are paying their hosts high six and low seven figure paychecks to low lifes like Shawn Kilinger. Hell, Lisa Robertson was trying to get even more money than the million a year she was making.
QVC finally told her to pound sand. And now she is a 50 yr old saleswoman without a job. Like she is going to get anything better than she had at QVC. Of course these costs are passed on to the customer. I use Amazon a lot more than QVC anymore.

The network is already hiring for its opens its new 1 million-square-foot West Coast distribution hub in Cali. Some 500 people will work there. But that’s apparently cold comfort to a lot of folk.

http://www.dailybulletin.com/business/20160129/qvc-readies-ontario-distribution-center-for-grand-opening

Christian Lacroix Brings Handbags To HSN

February 18, 2016

We’re having trouble keeping up with those busy bees at HSN. Now the home shopping network ls premiering a handbag collection from high-end French designer Christian Lacroix.

http://www.hsn.com/shop/cxl-by-christian-lacroix/13346

The line is called CXL by Christian Lacroix, with purses in the $60-to-$90 range.

“Since the creation of the couture house on 1987 Christian Lacroix’s style is unique, exuberant, colorful and baroque,” HSN.com says.

As we recall, back in the day Lacroix was known for his big, full, short skirts.

InStyle Mag Partners With HSN On Jewelry

February 18, 2016

We were paging through the March issue of InStyle magazine when we saw that the pub is partnering with HSN on a jewelry collection.

http://www.hsn.com/shop/instyle/14276?query=InStyle&isSuggested=False&

One of the jewelry pieces was featured in the editorial content of the magazine, and there was also a full-page ad for the collection that’s now available at the home shopping network.

We’re not much for fashion jewelry, but we like a number of the pieces, including safety pin necklace and a fringe mesh bracelet.

HSN.com says that Kahlana Barfield, InStyle fashion and beauty editor-at-large, is here “to show you the must-have pieces of the season.”

Paula Deen Cooks Up Home Collection For Evine Live

February 17, 2016

Paula Deen, described as “the Queen of Southern Cuisine” by Evine Live, is doing a home collection for the home shopping network that will bow next month.

Evine Live put out a press release Tuesday that said it was expanding its partnership with Paula Deen – “celebrity chef, restaurateur, author and two-time Emmy Award Winner” – by premiering Paula Deen’s Home on March 13 and 14.

Deen landed at Evine Live last year in the wake of the controversy over her making racist remarks years ago, a brouhaha that lost her a variety of gigs, including one on QVC.

She has been doing kitchen and pantry merchandise for Evine Live and plans to build on that success with the home decor collection.

“Working with Evine Live and connecting directly with my fans has been a wonderful experience,” Deen said in a canned statement. “I approach style the same way I approach cooking. You need the right ingredients to make it all work. A pinch of color, a dash of texture and the perfect mix of comfort and sophistication. I’m looking forward to sharing all of my passions with Evine Live’s customers – my love of art, style and design.”

Paula Deen’s Home will offer an assortment of bedding, and includes “a number of colorful designs inspired by her art and her home, including patterned and embroidered coverlet sets, comforter sets, embroidered bed sheets and cotton blankets,” according to the press release.

“Paula Deen is known best as the ‘Queen of Southern Cuisine,’ but few know that she’s also an accomplished painter, fashionista and a connoisseur of home décor,” Evine Live Chief Merchandising Officer Penny Burnett said.

“Our product development team partnered closely with Paula when designing this collection, taking inspirations from her art, style and Savannah, Georgia home. Paula Deen’s Home truly embodies Paula’s personal approach to design and we’re excited to introduce her millions of fans to this new line.”