Archive for July, 2017

QVC Mourns The Passing Of Kenneth Jay Lane

July 21, 2017

Our thanks to the readers who pointed out that jewelry designer Kenneth Jay Lane, whose baubles were sold on QVC, passed away this week.

The obit that The New York Times wrote had the headline “Kenneth Jay Lane, Jewelry Designer Who Made a Fortune Faking It, Dies at 85.”

We have to take issue with saying that Lane did “fake” jewelry, even though according to The Times that’s how he referred to his creations. After all, they were jewelry, just what was once called costume jewelry, but is now referred to as fashion jewelry. But we digress.

QVC mourned Lane’s passing on its Facebook page.

“We are saddened to learn of the passing of QVC’s own Kenneth Jay Lane<' the home shopping channel posted. "He will be greatly missed by all who knew him, but his legacy will live on through his designs. We are thankful to have spent more than 20 years with Kenneth as a part of our QVC family, and our thoughts & prayers are with his loved ones during this difficult time."

http://www.qvc.com/jewelry/kenneth-jay-lane/_/N-mfluZ1z141df/c.html

Anyway, he was a talent who will be missed.

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HSN, QVC’s Parent To Report 2Q Earnings

July 15, 2017

HSN Inc., about to be swallowed up by QVC’s parent company, as well as that parent, Liberty Interactive Corp., will be releasing their second-quarter results early next month, both companies announced this week.

HSN will report its second-quarter earnings Aug. 3 at 8 a.m., before the market opens.

Chief Financial Officer Rod Little; Bill Brand, chief marketing officer of HSNi and president of HSN; and Judy Schmeling, chief operating officer of HSNi and president of Cornerstone Brands, “who together constitute the Office of the CEO,” will hold a conference call at 9 a.m. to review these results.

Those interested in participating in the conference call should dial 877-307-0246 or 224-357-2394 at least five minutes prior to the call. There will also be a simultaneous audio webcast available via the company’s website at http://www.hsni.com.

A replay of the conference call can be accessed until Aug. 17 by dialing 855-859-2056 or 404-537-3406, plus the pass code 54744987 and it will also be hosted on the company’s website for a limited time.

Liberty Interactive President and CEO Greg Maffei will host a conference call to discuss results for the second quarter Aug. 8, at 2:30 p.m.

Following prepared remarks, the company will host a brief Q&A session during which management will accept questions regarding both Liberty Interactive Corporation and Liberty TripAdvisor Holdings.

Maffei may discuss the financial performance and outlook of both companies, as well as the proposed acquisition of HSN.

The second-quarter earnings conference call will be broadcast live via the internet. All interested participants should visit the Liberty website at http://www.libertyinteractive.com/events to register for the webcast.

Links to the press release and replays of the call will also be available on the website, and the conference call will be archived ror one year after appropriate filings have been made with the SEC.

What Does HSN’s Sale To QVC’s Parent Mean?

July 10, 2017

We’ve been busy at work, and in addition to that we wanted time to mull over Liberty Interactive Corp.’s purchase of HSN Inc. before we blogged in more detail about it.

For some reason we couldn’t find the conference call that Liberty and HSN honchos held on the deal last week, even though it was supposed to be archived on John Malone’s fiefdom’s website. But we did finally read through the slide-show presentation that went with the call.

http://files.shareholder.com/downloads/AMDA-GY7JI/4764467488x0x948623/652F4347-6F0B-48D9-9D4B-2EE0E92881D2/QVC_HSN_Investor_Presentation.pdf

First of all, the initial press release on QVC’s parent paying $2.1 billion for HSN was unclear, in that it did not spell out that there were no plans to merge the nation’s two largest home shopping networks. The investor slide presentation did bring clarity, saying that QVC and HSN will be maintained as distinct brands, which means five channels — QVC, QVC2, BeautyiQ, HSN and HSN2.

The goal is to preserve the “unique identities, cultures and customer following” for the networks.

But at the same time, according to the presentation, the plan is to “optimize five U.S.- based networks (QVC, QVC2, BeautyiQ, HSN, HSN2) and create complementary programming.”

Okey-dokey. Sounds a little contradictory to us.

The other goals are, straight from the presentation, to:

Collaborate on best-in-class digital platforms (mobile, personalization, social, marketing) and next-gen shopping innovations

Extend HSN’s Shop by Remote platform to QVC

Strengthen brand portfolios

Extend top HSN brands to QVC International and Zulily,

Leverage Zulily as brand feeder with younger customers, utilize QVC global development
capabilities

Explore cross-marketing opportunities to better engage existing and potential customers

Share best practices and tools, leverage top talent and create new professional-growth opportunities

Pursue integration opportunities to enable combined company to operate more efficiently,
fund innovation and enhance customer value, including:

Combining technology platforms where appropriate

Leveraging enhanced scale of supply chain and customer service networks

Eliminating redundant corporate and support services

Reducing costs through purchasing synergies

So we can expect to see HSN brands expand globally and pop up on QVC’s numerous international channels.

There were some very interesting additional facts in the presentation, as well. QVC has 8 million customers, and 6 million of them don’t shop at HSN today, according to Liberty. We find that hard to believe, since we shop at both nets and Evine as well, but that’s what they said. HSN has 5 million customers.

By cross-marketing, QVC can try to get some of HSN’s customers to shop with it.

QVC has 29 on-air hosts, while HSN has 24, just FYI.

And of course, whenever one company buys another one there is always talk of synergies, which basically means people are going to lose their jobs. In this acquisition, there’s a lot of places where QVC and HSN have overlap and where cost-cutting can happen. A lot of it may be behind the scenes, however.

For example, cable networks have what are called affiliates sales departments, the executives and sales reps who negotiate the contracts for QVC and HSN to get carried on your cable system or by your DBS provider, be it Comcast or DirecTV. You won’t need two affiliate sales departments to handle that function.

And with QVC and HSN under one roof, whoever survives in affiliate sales will now have a bundle of five networks it can bring to cable companies. Just like a Discovery Communications with its many networks or a Viacom, the QVC-HSN affiliate sales reps can tell a Comcast that if it carries smaller startup channels like BeautyIQ, it will get a better deal on the larger channels, QVC and HSN.

There are other “synergies.” Some vendors supply goods to several home shopping networks. One of our readers recently reported that she had ordered bedding from Paula Deen’s line on Evine, but when the order came it was Northern Lights, as we recall, which is sold by QVC. The point is that one manufacturer is making items for both channels.

Vendors who manufacture goods for QVC and HSN might get squeezed, with Liberty trying to negotiate much cheaper deals because it has leverage as a major customer of such companies.

The big advantage of this merger, as everyone and their mother has pointed out, is that this will increase QVC’s and HSN’s scale as digital players, putting them in a better position to compete against giant Amazon. The digital sales of both those home shopping channels have soared over the past few years, and with distribution centers and those of their sister companies, Zulily and Cornerstone, they gain traction against the big “A.”

HSN and its Cornerstone unit have warehouses in cities such as Piney Flats, Tenn., Fontana, Calif., Roanoke, Va., Monroe, Ohio, and Scottsdale, Ariz.

For QVC and Zulily, there are fulfillment centers Rocky Mount, N.C., Florence, S.C., Suffolk, Va., Ontario, Calif., Lancaster and Bethlehem, Penn., McCarran, Nev., and Lockborne, Ohio.

Liberty needs a lot of distribution points to beat Amazon at its own quick-delivery game, but are all the above too many? We’ll see.

Liberty crowed about HSN in its presentation, saying that it brings a “rich legacy of innovation” to the QVC Group.

Liberty cited HSN’s “highly engaging programming and events, including movie tie-
Ins” and “American Dreams entrepreneur search series.”

There was also a shout-out to HSN’s leading brands, including Joy Mangano’s
Ingenious Designs, Andrew Lessman’s ProCaps Laboratories, IMAN Global Chic, Jennifer Flavin Stallone’s Serious Skincare, Wolfgang Puck Kitchen, Diane Gilman
Fashion and the Concierge Collection.

QVC’s top honcho, Mike George, will ride herd over the new and larger QVC Group.
But what will happen with the top management at HSN?

Former CEO Mindy Grossman has flown the coop, already starting her new gig at Oprah Winfrey’s Weight Watchers. Bill Brand is a very talented HSN honcho, and we hope he’s in line for a promotion to fill Grossman’s high-heels.

QVC To Buy HSN In $2.6 Billion Merger

July 6, 2017

You may have to kiss goodbye to a lot of your favorite hosts and vendors at the two top home shopping networks, because QVC’s parent company is buying HSN.

At first blush, it appears that Liberty Media Interactive Corp. will keep both QVC and HSN operating as two separate channels, but John Malone’s company anticipates cost savings, and that that usually translates to people losing jobs. Believe us, we know firsthand. But we have not listened to the conference call on the deal yet to be sure.

The huge news was announced Thursday morning, coincidentally just a day after HSN bigwig Mindy Grossman started her new gig at Oprah Winfrey’s Weight Watchers.

http://ir.libertyinteractive.com/releasedetail.cfm?ReleaseID=1032273

http://www.philly.com/philly/business/qvc-home-shopping-network-merge-20170706.html

The acquisition gives Liberty a portfolio of five domestic home shopping channel, namely QVC, QVC2, BeautyiQ, HSN and HSN2.

The all-stock deal is valued at $2.6 billion, with Liberty acquiring the 62 percent of HSN Inc. it doesn’t own. Liberty will offer compensation of $2.1 billion in shares, but the press release says there will be $2.6 billion of “total enterprise value,” whatever that means.

“We are excited to announce the acquisition of HSNi,” Liberty CEO Greg Maffei said in a canned statement.

“The addition of HSN will enhance QVC’s position as the leading global video eCommerce retailer. Every year they together produce over 55,000 hours of shoppable video content and have strong positions on multiple linear channels and OTT [over the top] platforms. The value of the combined QVC, HSNi and zulily will be further highlighted when later this year QVC Group becomes an asset-backed stock as part of the previously announced split-off of Liberty Ventures.”

Here’s what smiling QVC honcho Mike George had to say in the press release.

“We’re thrilled to welcome the HSNi team to our company,” he said.

“HSNi founded the industry 40 years ago and helped it grow with exciting initiatives like Shop By Remote and media integrations with leading content producers. By creating the leader in discovery-based shopping, we will enhance the customer experience, accelerate innovation, leverage our resources and talents to further strengthen our brands, and redeploy savings for innovation and growth. As the prominent global video commerce retailer and North America’s third largest mobile and eCommerce retailer, the combined company will be well-positioned to help shape the next generation of retailing.”

Here’s what Liberty says the benefits of the deal are: increase scale, enhancing the competitive position of QVC Group; meaningful synergies through cost reduction and revenue growth opportunities; increased development of eCommerce, mobile and OTT platforms; optimize programming across five U.S. networks; cross marketing to better engage existing and potential customers; financial optionality due to HSNi’s lower debt leverage.

HSNi consists of HSN and Cornerstone, which includes Ballard Designs, Frontgate, Garnet Hill, Grandin Road and Improvements.

Post-closing of the deal, expected in the fourth quarter, HSNi headquarters will remain in St. Petersburg and will be overseen by George.

“Joining the QVC Group will give us instant access to global consumer markets, a leadership team with deep expertise and a global perspective, and the opportunity to further strengthen our content-based brand portfolios in a changing retail landscape,” said Arthur Martinez, HSN’s board chairman.

“We have both been innovators in a growing and dynamic retail environment with a unique vision of what shopping should be, and as new technologies continue to change our everyday lives, together we can develop the next generation of shopping for the next generation of consumers.”

Maffei and George discussed the transaction in a conference call this morning, which will be archived on Liberty’s website. To access the webcast go to http://www.libertyinteractive.com/events.

We can’t listen now, but will later and report back.