Archive for August, 2017

QVC’s Shawn Killinger Makes Page Six

August 24, 2017

Imagine our surprise a few days ago when we were doing our morning ritual, reading the New York Post’s gossip column, Page Six, when we saw a name from QVC pop up.

One of the items talked about a fancy clambake in the Hamptons for a local magazine.

The final line said, “Also in attendance were Jill Martin and QVC’s Shawn Killinger, who showed off her adopted 2-month-old baby girl Jagger Jude.”

http://pagesix.com/2017/08/14/chris-cuomos-daughter-steals-the-show-at-hamptons-clambake/?_ga=2.61503781.821569937.1502943000-1387340377.1408419542

Of course, Martin is on QVC with a product line, and Killinger is off spending time with her infant. We’re not quite sure how she warranted a mention in Page Six.

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Evine Bringing Paula Deen To State Fair

August 24, 2017

Evine may be No. 3 in the home shopping world, but it tries harder.

The network will be broadcasting live from the Minnesota State Fair, a 12-day event that attracts nearly 2 million visitors annually. Evine, of course, is based in that cold state.

On the fair’s first day, today Thursday, the telecast will include Southern cuisine queen Paula Deen, John O’Hurley (J. Peterman from Seinfeld), as well as Akos “The Solutionist” Jankura, a problem-solving expert.

“Simply put, the Minnesota State Fair is one of the biggest – and best – fairs in the U.S. and we couldn’t be more excited to be the first retailer of our kind to broadcast live from such an event,” Evine CEO Bob Rosenblatt said in a canned statement.

“The ‘Great Minnesota Get-Together’ is the perfect opportunity to bring the Evine experience to our Minnesota neighbors and have a chance to meet new friends of Evine as well.”

Fair-goers can watch “Paula Deen’s Kitchen,” a two-hour show that will broadcast live to Evine’s homes. She “will demonstrate how to whip up fair-food with ease, and with less fat, using her air fryer and other signature kitchen items,” according to Evine’s press release.

In addition to having a chance to be part of the live audience, fair attendees will have an opportunity to meet Deen and get a photo or autograph at 3 p.m.

“Being from the South, I’m no stranger to a good ol’ fair,” Deen said in her canned statement. “I’ve heard the Minnesota State Fair is truly in a league of its own and I am excited to be a part of one of the greatest get-togethers in the country. I can’t wait to try some classic fair foods, test my hand at carving a butter princess, cook up my favorite dishes, and get to meet all of the wonderful people at the Evine stage.”

Following Deen, at 3 p.m. “Pet Shoppe with John O’Hurley” will broadcast live and present pet-care products. As with Deen, fans will get a chance to meet O’Hurley starting at noon.

The final live broadcast hour of the day will feature Akos “The Solutionist.” He will be live at 5 p.m.

Viewers are also invited to watch a Facebook Live show featuring Deen at 2:30 p.m. and a YouTube Live show covering an “Evine Found at the Fair” product search at 6 p.m. Fair-goers will also have opportunities to win prizes, take photos and meet some of Evine’s hosts.

Evine 2Q Sales Down 5 Percent, To $149 Million

August 24, 2017

Evine became the third home shopping network to see its sales drop in the second quarter, with them dipping roughly 5 percent to $149 million, the company said Wednesday.

Evine also has a net loss of $2 million, flat year-over-year, and with adjusted EBITDA of $3.5 million.

http://s21.q4cdn.com/129019908/files/doc_presentations/2017/q2/Evine-Earnings-Presentation-F17-Q2.pdf

QVC’s parent, Liberty Interactive Corp., already reported reported that the No. 1 home shopping network saw its second-quarter revenue drop 4 percent, to $1.37 billion. And HSN suffered a 4 percent drop in its second-quarter sales, to $532.2 million.

“This second quarter is the final quarter of expected revenue decline, which was related to the year-long re-balancing of our consumer-electronics mix of business that began in April of last year,” Evine CEO Bob Rosenblatt said in a canned statement.

“This re-balancing was an important step to position our merchandising offering for long-term profitable growth and we accomplished it while again delivering on our quarterly EPS [earnings per share] guidance.”

Rosenblatt then crowed about some launches that the network has coming up.

“When we combine this progress with the launch of more than 10 million high-definition homes and the launch of our high-definition signal in September, we believe the second half of fiscal 2017 is positioned well to deliver solid, profitable growth,” he said.

Evine’s top-performing category in the quarter was home, which increased 9 percent year-over-year.

Consumer electronics, which declined again as a result of management’s reduction of lower-margin merchandise, declined 8 percent. The so-called “wearables” group decreased collectively by 8 percent, driven by continued pressure in watches.

The return rate for the quarter was 19 percent, an improvement of 70 basis points year-over-year.

Gross profit as a percentage of sales decreased 20 basis points to 38 percent year-over-year, driven primarily by mix pressure from the home category. Gross profit dollars decreased 6 percent to $56.5 million year-over-year.

Operating expense decreased $3.1 million to $57 million, a 5 percent decrease, driven by reduced distribution and selling expenses.

“It is clear that there is a sea change occurring throughout the retail landscape,” Rosenblatt said.

“All retailers, be it online or those with a significant bricks-and-mortar presence, continue to try to find better and differentiated ways to connect with the consumer. We believe interactive video commerce messaged to the consumer, based on the delivery platform used, whether that be through social, or traditional eCommerce, in concert with the data and predictive analytics available, marks the next significant growth curve,” he said.

“When I look out two to three years from now,there will be two types of retailers: Those whose models are based on price, selling commoditized products available on multiple platforms, and those whose models are based on product exclusivity and the customer experience. Our goal is to be a leader in the latter category.”

“Interactive video is the cornerstone of our digital commerce company that is driving business opportunities in all digital platforms and business models, from mobile to social, from laptop to television, and from merchandising business models to web service business models. We plan to do this while engaging with all types of customers, from millennials to baby boomers and to both women and men. A significant portion of the population will continue to purchase product from a curated assortment that facilitates the opportunity of discovery. We believe interactive video commerce at scale, an expertise we have continued to refine over many years, gives us an unfair advantage in delivering that experience.”

Ex-QVC Exec Indicted for $1 Million Fraud, Kickbacks

August 11, 2017

QVC is in the news again, in an embarrassing light again. First there was that lawsuit that an ex-female exec filed against a high-end dating service. On Thursday, one of the home shopping network’s ex-execs was indicted on charged of defrauding the channel of more than $500,000 and taking kickbacks from vendors.

Philly.com did a detailed story, linked here.

http://www.philly.com/philly/business/former-qvc-executive-accused-in-million-dollar-fraud-20170810.html

This greedy chuckle head, whose $239,000 salary apparently wasn’t enough, gypped QVC, charging for luxury hotel stays and spa treatments when two vendors were actually footing those bills. He also got botox and $28,000 custom tables for his digs using his illegal gains. Some of this happened when the guy, James Falkowski, was in L.A. for the red-carpet event that QVC had to tie-in with the Oscars.

We found the press release on the indictment, so we decided to publish it so you could see exacty what the D.A. had to say about the charges.

https://www.justice.gov/usao-edpa/pr/former-qvc-director-charged-million-dollar-fraud-scheme-involving-hollywood-pr-agency

Former QVC Director Charged In Million-Dollar Fraud Scheme Involving Hollywood PR Agency and NYC Production Company

PHILADELPHIA – James D. Falkowski, a/k/a “Jamie Falkowski,” 42, of Buffalo, New York, was charged by indictment1, unsealed today, with eleven counts of wire fraud, eleven counts of mail fraud, and one count of conspiracy, announced Acting United States Attorney Louis D. Lappen.

According to the indictment, Falkowski – while working as a QVC Director responsible for enhancing QVC’s brand and reputation in the entertainment and fashion industries – engaged in a multi-layered fraud scheme that enabled him to live a luxury lifestyle through fraud.

Falkowski allegedly used a variety of methods to fraudulently obtain from QVC over $1,000,000 worth of money, goods and services, all without QVC’s knowledge or approval.

Specifically, the indictment alleges that Falkowski fraudulently caused QVC to pay for: hundreds of thousands of dollars of his personal expenses, including Falkowski’s first-class travel, luxury hotel and resort stays, spa treatments, upscale restaurants, luxury clothing, luxury accessories, and botox treatment; approximately $200,000 in private luxury chauffeur rides for himself and his friends and associates; approximately $70,000 in payments to his personal vendors and creditors, including over $28,000 in payments to a custom furniture maker for two tables for Falkowski’s Philadelphia apartment; and approximately $59,500 in pre-paid American Express, Tom Ford, and Barney’s New York gift cards that he used for himself.

Falkowski also entered into fraudulent kickback arrangements with two separate QVC vendors, who collectively paid Falkowski approximately $240,000 as his cut of the kickback arrangement.

Allegedly, Falkowski fraudulently abused QVC’s product requisition process to shower his friends and associates with at least tens of thousands of dollars’ worth of QVC products, all at QVC’s expense.

The indictment alleges that Falkowski caused QVC to hire Los Angeles-based PR firm “The Steinberg Group,” d/b/a “dOMAIN” (“TSG”), to serve as QVC’s outside PR agency.
After QVC hired TSG, Falkowski allegedly used TSG to “launder” hundreds of thousands of dollars of his personal expenses.

Falkowski did this by causing TSG to reimburse him directly for his personal expenses, but after paying Falkowski in the dollar amounts he commanded, TSG subsequently obtained reimbursement from QVC by issuing fraudulent invoices to QVC often written at Falkowski’s direction and, in certain instances, written by Falkowski himself.

Those fraudulent invoices, by design, did not reveal to QVC the true nature of Falkowski’s expenses.

Falkowski also caused TSG to reimburse him for expenses that he also submitted directly to QVC for reimbursement, thus causing QVC to unknowingly repay him multiple times for the same expenses.

And, in some instances, Falkowski allegedly created entirely fake invoices and bills for submission to QVC to hide the true costs of his expenses from QVC.

Falkowski also allegedly used a second QVC vendor, “SPEC Entertainment,” d/b/a “CS Global” (“SPEC”), to fraudulently alter invoices that SPEC submitted to QVC to hide the true costs of Falkowski’s expenses – including by reducing the cost of Falkowski’s luxury hotel charges on invoices submitted to QVC by tens of thousands of dollars, and by artificially inflating an event invoice to cover Falkowski’s personal vacation to the Turks and Caicos Islands.

Separately, the indictment alleges that Falkowski entered into fraudulent kickback arrangements with TSG and SPEC – both of which Falkowski caused QVC to hire, and both of whose relationships with QVC Falkowski controlled.

Regarding TSG, Falkowski allegedly instructed TSG’s President and TSG’s General Counsel how to become a QVC “vendor representative” and earn royalties from QVC.
Falkowski thereafter secretly assisted TSG leadership in negotiating against QVC – his own employer – by providing TSG with QVC’s proprietary contractual information, which enabled TSG leadership to negotiate for, and obtain, a larger royalty percentage over a longer period of time from QVC.

In return, TSG leadership secretly cut Falkowski into the deal, and made him their “silent partner” – agreeing to pay Falkowski a kickback of fifty percent (50%) on all royalty payments received from QVC, as well as for funds received from a separate deal related to product sold by a QVC competitor.

After Falkowski was terminated by QVC, Falkowski allegedly sent a private email to TSG’s President and TSG’s General Counsel, stating: “Let’s be clear of a few things: [. . . ] You have a better deal [at QVC] than any other rep because of me solely. [ ] we do not have any contract between us of our deal JUST [TSG President’s] word that we split things 50/50 always. This was because of the complications while I was at QVC.”

TSG, which did business as “Domain Miami LLC” for its royalty deal with QVC, earned hundreds of thousands of dollars in royalties from QVC pursuant to the deal negotiated with Falkowski’s secret assistance, of which TSG kicked back approximately $160,981.73 to Falkowski as his share of their fraudulent deal.

Falkowski also allegedly entered into a similar fraudulent kickback arrangement with SPEC, pursuant to which he instructed SPEC how to serve as a QVC vendor representative, and in turn was secretly cut into the deal by SPEC as a one-third (33%) partner. SPEC earned hundreds of thousands of dollars in royalties from QVC, of which it kicked back approximately $81,571.23 to Falkowski as his share of their fraudulent deal.

If convicted of all charges, Falkowski faces a potential advisory sentencing guideline range of 108-135 months in prison, three years of supervised release, a possible fine, and a $2,300 special assessment. Restitution may also be ordered.

The case was investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney James Petkun.

Ex-QVC Exec Sues $150,000 Dating Service

August 10, 2017

Thanks to Steve Bryant for tipping us off to this one, and it’s a doozy.

A former top QVC executive has filed a very unusual lawsuit, seeking damages from a high-end dating service that she claimed did her wrong. The case settled quickly, but the suit was an eye-popper.

A lot of paper’s did stories on the short-lived litigation, but we’ll give you this detailed account from Philly.com. It’s a great read.

http://www.philly.com/philly/news/pennsylvania/philadelphia/ex-qvc-honcho-shopped-for-love-then-sued-her-matchmaker-20170809.html

Darlene Daggett, QVC’s former president for U.S. commerce, alleges that she got rooked when she paid $150,000 to Kelleher International to find her a mate. Alas, like many of us know first-hand, it’s tough out there in the dating world for baby-boomer women.

“Kelleher’s ‘highly screened’ matches for Daggett included men who were married, mentally unstable, physically ill, pathological liars, serial Lotharios, stalkers, convicted felons, and men unwilling or unable to travel and/or the subject of professional sanctions,” according to the suit.

We’ll let you in on a little secret. Kelleher advertises in Phoenix magazine, which we subscribe to. Many years ago, when we were heading out to AZ, we called the dating service to get information about it.

When we heard the fees, which were out of this world, we quickly got off the phone – you know, like you do when you ask to see a piece of jewelry and its so pricey your eyeballs almost fall out of their sockets. And then you slink out of the store with your tail between your legs?

Anyway, if you ever feel bad about your dating life, just reread the story about Daggett’s lawsuit and you’ll feel much better.

Catherine Zeta-Jones Debuts ‘Casa’ Line On QVC

August 10, 2017

We’ve just what you’ve been waiting for: a celebrity doing a product line for a home shopping network.

Now it’s Catherine Zeta-Jones, who InStyle magazine had the scoop on. It reported that the sultry actress is launching a home collection, Casa Zeta-Jones, on QVC on Sept. 28. You know what they say, mi casa es su casa.

http://www.instyle.com/news/catherine-zeta-jones-qvc-home-collection

The article notes that Zeta-Jones had some bona fides, in that she is the daughter of a seamstress.

“I can’t wait for everyone to see Casa Zeta-Jones,” she said in a statement to InStyle. “I am thrilled to bring my home and bedding line to QVC. This is a project I have been passionate about and working on for years now, and I am delighted to share it with QVC customers.

The line will include towels, bedding, rugs, and table linens, “all of which will take inspiration from the actress’s Welsh heritage,” according to InStyle.

QVC’s Second-Quarter Sales Dip 4 Percent

August 10, 2017

Like HSN, which it will soon own, QVC had a tough second quarter.

QVC’s parent, Liberty Interactive Corp., this week reported that the No. 1 home shopping network saw its second-quarter revenue drop 4 percent, to $1.37 billion, year over year.

QVC “experienced year-over-year revenue declines in all categories except home,” Liberty reported. As for the 4 percent drop, it was “inclusive of an estimated 1 percent negative impact from system outage in second quarter that resulted in shipment backlog into third quarter.” That was news to us.

QVC’s operating income, a key measure, dipped 5 percent, to $225 million.

“Operating income margin and adjusted OIBDA margin performance primarily reflect lower bad debt, higher product margins and higher credit card income, partially offset by higher bonus expense, warehouse costs and depreciation,” according to Liberty.

Similarly, HSN recently suffered a 4 percent drop in its second-quarter sales, to $532.2 million.

The numbers we just provided are for domestic QVC alone, not for the stable of home shopping channels that it has across the globe.

“QVC had a solid Q2, with revenue performance similar to Q1 and improved adjusted OIBDA margins,” Liberty Interactive President and CEO Greg Maffei said in a canned statement. “We were thrilled to announce the acquisition of HSNi, which will enhance QVC’s position as the leading global video eCommerce retailer.”

QVC honcho Mike George crowed about the performance of the international networks, but not the U.S. one.

“We were pleased to generate strong margin expansion in the second quarter due to our focus on cost controls and avoidance of excessive promotional activity,” George said in his canned statement.

“We are executing on a number of strategies that we expect to restore healthy growth, with a particular focus on greater diversity and newness in our assortments. We were delighted with the strong performance of our International segment, which was led by QVC Japan. We look forward to welcoming the HSNi team to the QVC family with the completion of the acquisition in the fourth quarter, which we believe will be accretive to all of our stakeholders.”

Evine To Report 2Q Results Aug. 23

August 4, 2017

Evine will release its second-quarter earnings Aug. 23 before the market opens at roughly 6 a.m. CEO Bob Rosenblatt and Chief Financial Officer Tim Peterman will hold a conference call at 8:30 a.m. to review the results.

Those interested in participating in the conference call should dial 1-877-407-9039 or 1-201-689-8470 (international) at least five minutes prior to the call.

There will be a simultaneous audio webcast available at the following link:

http://event.on24.com/wcc/r/1400380/564716D174B109733474197672B07CA3

A replay of the conference call will also be hosted on the company’s website for a limited time.

HSN 2Q Sales Dip 4 Percent, To $532.2 Million

August 4, 2017

Looks like the second quarter another was a tough one for home shopping networks.

On Thursday HSN reported that its net sales for the quarter were $532.2 million, a 4 percent drop from the prior year. Sales grew in wellness and home, offset by decreases in electronics, beauty and jewelry.

The earnings press release talked about Liberty Interactive Corp.’s pending acquisition of HSN.

“We continue to focus on building our proprietary product pipeline which we believe will ultimately lead to growth in the business,” HSN Inc. Chief Financial Officer Rod Little said in a canned statement. “The continued strength of digital sales, and mobile sales in particular, has been very encouraging with digital sales now representing 55% of our total revenue. Mobile, which we see as our flagship, continues to be our fastest growing sales channel and a source of new customer acquisition.”

“As we prepare for the pending acquisition by Liberty, we remain committed to our strategies to improve performance both in the short and long term,” he said. “Our key priorities remain: acquiring and retaining customers via a robust and relevant product portfolio, optimizing our digital platforms and improving efficiencies throughout the business, all to drive consistent shareholder value creation.”

The No. 2 home shopping network said shipping revenue decline primarily due to the August 2016 changes in the standard shipping rates and increased promotions. The average price point decreased 7 percent, while units shipped increased 2 percent largely due to changes in product mix, according to the press release.

Gross profit decreased 5 percent to $186.8 million. Gross profit rate decreased 30 basis points to 35.1 percent, primarily due to a decrease in shipping revenue and higher shipping and fulfillment costs, partially offset by higher product margins and lower inventory reserves due to a change in accounting estimate.

The increase in shipping and fulfillment costs was primarily due to annual outbound rate increases and implementation costs associated with HSN’s ongoing supply-chain optimization initiative, the network said.

Operating expenses increased 4 percent to $147.6 million driven by about $3.7 million in transaction costs related to the merger agreement, an increase in employee-related costs, higher costs incurred as part of the supply-chain O initiative and an increase in bad debt expense, partially offset by lower stock-based compensation expense primarily due to the departure of CEO Mindy Grossman during the quarter.

Excluding non-cash charges and transaction costs, operating expenses increased 4 percent and were 25.6 percent as a percentage of net sales compared to 23.5 percent in the prior year.

Operating income decreased $15.9 million, or 29 percent, to $39.2 million. Adjusted EBITDA decreased $15.8 million, or 24 percent, to $50.5 million. The supply-chain implementation resulted in an additional $2.9 million of costs in the second quarter, which impacted gross profit and operating expenses.