Archive for November, 2018

Former HSN Vendor Jennifer Flavin Set For January Evine Debut

November 30, 2018

Jennifer Flavin, a longtime HSN skin care vendor and wife of actor Sylvester Stallone, is in fact coming to Evine.

This week in its third-quarter earnings report the Minnesota home shopping network said it had suffered a dramatic 12 percent drop in sales. CEO Bob Rosenblatt attributed the bad news to a new vendor’s debut being delayed until January.

Then a kind soul tipped us off about a subsequent securities filing that Evine made. In it, Evine said that Flavin, whose line is called Serious Skincare, was scheduled to debut on the network Jan. 3. It sounds to us that she is the vendor that Rosenblatt was eluding to.

There was no explanation for the delay, but sometimes legal issues are involved.

Flavin, as well as new Evine vendor Jane Fonda, are getting company stock.

This is from Evine’s 8-K:

On November 23, 2018, we entered into a restricted stock award agreement with Flageoli Classic Limited, LLC (“FCL”) granting FCL 1,500,000 restricted shares of our common stock in connection with and as consideration for entering into a vendor exclusivity agreement between our companies.

The vendor exclusivity agreement grants us the exclusive right in television shopping to market, promote and sell products under the trademark of Serious Skincare, a successful skin-care brand with a loyal customer base, that is expected to launch on our television network on or about January 3, 2019. Additionally, the agreement identifies Jennifer Flavin-Stallone as the primary spokesperson for the brand on our television network.

500,000 of the restricted shares will vest on the first business day following the initial appearance of the Serious Skincare brand on our television network. The remaining restricted shares vest in equal amounts on the first and second anniversaries of the initial appearance date. This summary description of the restricted stock award agreement is qualified in its entirety by reference to the agreement, a copy of which is included as Exhibit 4.1 to this Current Report and incorporated by reference in this Section 3.02.

On November 27, 2018, we issued warrants to Fonda, Inc. for 1,500,000 shares of our common stock in connection with and as consideration for entering into a services and trademark licensing agreement between our companies. Under the agreement the parties plan to develop and market one or more lines of products, including a fitness and wellness lifestyle brand.  Additionally, the agreement identifies Jane Fonda as the primary spokesperson for the brand on our television network. The parties also plan to partner with key retailers to offer a brick & mortar version of the brand.

Brutal Third Quarter for Evine

November 29, 2018

As far as we’re concerned it was a tough third quarter for Evine, which reported its results Wednesday.

Net sales dropped 12 percent year-over-year, to $131.7 million. There was a net loss of $9.2 million versus a net loss of $1.1 million the prior year.

The good news, according to the home shopping network, was that: It introduced 40 new brands and brand extensions during the third quarter, compared to 21 in the prior year; it successfully opened a Los Angeles office and launched a L.A. studio with the first broadcast Oct. 18; signed its first client to a new third-party logistics services business; and secured 2 million new HD channels that will launch in the fourth quarter.

We assume that actually means the HD channel will launch to 2 million more homes, not 2 million HD channels will launch.

It was hard for CEO Bob Rosenblatt to put a rosy spin on it all.

“We had a very difficult quarter, which was disappointing given that we entered the third quarter with strong trends across multiple business drivers, and after delivering several consecutive quarters of solid performance,” he said in a statement.

“Our top-line sales were not where they needed to be or where we expected them to be due to the delayed launch of a new proven brand partner. The shift in the timing of the launch put undue pressure on our existing brands and impacted productivity across all of our product categories. The premiere of this well-established brand is now anticipated to occur in January 2019, and we expect that its proven track record of success and its large and loyal customer following, along with other exciting new launches, will put us back on track for sustainable growth.”

Anyone know what he’s talking about?

“Our goal and strategy remain the same: to drive sustainable growth through the curation and nurturing of a strong collection of brands. This strategy delivered growth in adjusted EBITDA in eight of the past 10 quarters,” Rosenblatt said. “Our expertise is in building great brands and providing a dynamic platform for our core brands. I am encouraged by the quantity and quality of the new brand launches during the quarter and look forward to nurturing and growing these brands over time.

“Additionally, our new L.A. studio and office is providing a previously untapped pipeline of brands and new partners that align with our business strategy and model. Our new studio and entrance into direct-to-consumer third-party logistics services were wins for us in the third quarter as we continue to move our company forward towards our goal of being a leading interactive video and digital commerce company.”

Here are some 3Q highlights:

  • The top-performing category in the quarter was beauty & wellness, which declined 4 percent year-over-year. Subscription sales increased 13 percent and continue to help this category be one of the top performers.
  • Digital net sales as a percentage of total net sales increased 40 basis points to 51.9 percent, reflecting our continued focus on making the customer experience seamless across all platforms.
  • The return rate for the quarter was 19.9 percent; an increase of 80 basis points year-over-year driven by increased ASP and increased mix into our jewelry & watches category.

Jane Fonda Comes to Evine

November 29, 2018

This is a pretty good get for Evine: Jane Fonda.

exclusive deal to develop a lifestyle brand “centered around her deep roots in the fitness arena.”

The line’s merchandise will include active wear, athleisure options, health and nutrition products and fitness equipment.

“Evine plans to bring the brand to life from its newly launched studio and office space in Los Angeles,” the press release said.

Throughout the year, Fonda will appear on the network. In addition, Evine plans to partner with key retailers to offer a brick-and-mortar version of the brand.

“I have a life-long passion for fitness and health not just because I look better when I take care of myself but because it makes me feel better and think better,” Fonda said in a canned statement. “I am excited about partnering with Evine because their strong marketing platform will allow me to bring my fitness knowledge and creative ideas to a market that is lacking strong offerings for women over 50. We are, after all, the fastest growing demographic in the world.”

On Oct. 1 Evine launched its product-development division in L.A. We bet that helped lure Fonda to the channel, since we can’t see her flying out to Minneapolis in the winter.

Having Fonda on is a bit of a risk, since she is a polarizing figure because of her anti-Vietnam War activities.

The goal of Evine’s new product division is to add exclusive and propriety products and brands to its mix, and it is being spearheaded under the direction of exec Nicole Ostoya,.

“Jane Fonda has a lifetime of experience in the health and fitness industry. She holds the unique ability to relate to women of all ages and backgrounds,” said Ostoya, managing director of Evine’s Brand Development division.

“We love what she stands for as an artist, expert and activist. What has been most impressive, is her dedication to domestic production and executing quality and sustainable practices. These values align perfectly with what our customers have been asking for. We wholeheartedly believe in everything Jane advocates for and could not be more thrilled for this partnership.”

 

HSN Jewelry Maven Heidi Daus Expands in Montclair, N.J.

November 26, 2018

A year ago we were working at a scrappy start-up print paper, Montclair Local, in the town where we live in New Jersey. And during that one-year tenure we had to cover many a long and boring meeting. The Zoning Board of Adjustment meetings were often especially grueling.

But we would have been really jazzed to cover the recent zoning board meeting regarding HSN jewelry vendor Heidi Daus.  She lives and works in Montclair, and we even ran into her once at the local QuickChek. Her husband, Mitchell MacGregor, owns a construction company.

MacGregor appeared before the board seeking a variance to expand the property on Forest Street in Montclair where Daus has offices and storage space for her fashion jewelry business.

According to the website Baristanet, MacGregor was seeking permission to build a dormer on the Heidi Daus HQ, an 850-square-foot expansion of the 5,643-square-foot property.

MacGregor told the board that the site acts as a showroom and a spot where the jewelry designs are created, Baristanet reported. The jewelry itself is manufactured in China, not Montclair.

MacGregor and Daus got their variances. They were represented by Montclair attorney Alan Trembulak, who we always enjoyed working with.

Evine Host Allison Waggoner Takes a Powder From the Network

November 26, 2018

Evine host Allison Waggoner has exited the Minnesota-based home shopping network.

The blonde posted the news in a rather brief missive on Facebook, with few details.

As we take it that she did the food-cooking shows, we never saw much of her, since we avoid that home-shopping programming like the plague. But we do know that she has written a number of bestselling cook books, according to her own website.

Her bio is still on Evine’s website, BTW.

“Whether shopping for beauty, electronics, jewelry, or cookware — Allison Waggoner provides a sense of authenticity and expertise that viewers trust,” it says. “Allison is our classically trained chef and host of Evine’s original cooking show, The Sizzle. When she’s away from work, Allison enjoys traveling, reading, and spending time with her daughter.”

 

QVC, HSN Tout Digital Initiatives — and Baby, Outdoor and Tabletop

November 20, 2018

Well Qurate Retail Inc., parent of QVC and HSN, apparently had a lollapalooza of an Investor’s Day last week in the Big Apple.

The webcast of the dog-and-pony show for Wall Street runs more than six hours. You can hop on Qurate’s website if you want to listen.

http://ir.qurateretail.com/events.cfm.

We’re dedicated, but not that dedicated. But Qurate put out a press release Monday summarizing some of the takeaways that honcho Mike George shared.

http://ir.qurateretail.com/news-releases/news-release-details/qurate-retail-announces-new-digital-investments-and-cost

It’s digital, digital and more digital, according to George. The home shopping channels are venturing onto new turf — baby, outdoor and tabletop. And George has five biggies on his “To-Do” list.

• Be the destination for product discovery.
• Inspire shopping journeys spanning all media platforms customers use.
• Make digital marketing a powerhouse demand driver.
• Extend the conversation through the power of social media.
• Enhance the service experience.

“The soul of the shopper, over time and across generations, hasn’t really changed,” George said in the press release. “Shopping is still about discovering great products, at great values, with great stories. It’s joyful, inspiring and built on trust. It lifts people up, helps them solve old problems in new ways, makes their lives easier, and connects them to the wider world. This is what we do, and this is why we have so many opportunities to evolve and grow in today’s rapidly changing retail and media landscape.”

We’re going to post the press release directly, from the horse’s mouth, so to speak, on the  priorities:

Be the destination for product discovery

“Our business model starts with being great product curators,” George said. “We’re committed to bringing our customers more discoveries, increasing product differentiation, driving strong values, and engaging customers of all generations.”

Qurate Retail is investing in an expanded digital store, adding 180 new digital-only brands across HSN and QVC over the past few months and entering new categories, such as baby, outdoor and tabletop. Year-to-date, the company has hired over 25 people to help drive this effort. In addition, more brands with strong cross-generational appeal are launching first on digital.

Qurate Retail also is launching Qurate D3 (for Discovery, Design, and Development), an expanded function to find or develop exclusive product lines around the world.
Inspire shopping journeys spanning all media platforms customers use.

“The explosion of digital media creates enormous opportunities for us to access, engage, and inspire consumers of all generations, over her video platforms of choice, with the right content, at the right time,” George said. “We have a strong advantage over other retailers or content programmers: We own all of our content, our incremental cost to create content is low, and we already have significant experience distributing content across emerging and other digital platforms.”

Qurate Retail continues to expand viewership across media platforms. In the U.S., TV viewership for QVC and QVC2 rose 5% year-to-date. HSN and QVC continue to increase their presence on traditional TV platforms. In addition, the brands are assessing how to optimize the positioning, programming, and scheduling of the five U.S. networks (QVC, QVC2, HSN, HSN2 and Beauty iQ) to appeal to the broadest range of consumers and provide maximum choice.

Viewership on new media platforms is also growing. From Q3 2017 to Q3 2018, minutes viewed via QVC US OTT platforms (Amazon, Apple, Roku), Facebook Live5 pages and digital platforms rose by more than 75%, while minutes viewed via the QVC US YouTube page doubled.

Early next year, Qurate Retail will build on its mobile leadership by launching a new Watch App, designed to be the daily discovery destination for today’s mobile consumer, with easy access to live shows, product videos and episodic content. By liking videos, users will be able to create their own playlists, and a click on a video will bring up product details and the ability to purchase.

In addition:

• The next generation of HSN’s proprietary Shop by Remote app is rolling out, and QVC began deploying the app earlier this month as well.
• QVC is expanding its OTT apps, including the October 2018 launch on Amazon Fire and the June 2018 launch of a new OTT service in Germany.

Make digital marketing a powerhouse demand driver

“We are rapidly scaling our digital marketing to generate demand, showcasing our best items, complementing the power of our TV distribution, and driving new generations of customers to our new media platforms,” George said.

Qurate Retail is building an in-house marketing agency to support QVC and HSN, drawing top talent from digital marketing leaders. The team is leveraging machine learning tools from zulily to create and deploy advertising intraday to maximum effect.

Digitally-driven sales are growing, driven in part by digital marketing. Year-to-date, sales for items that are promoted only via QVC’s digital platforms rose 11%, and sales for items that had not been featured on-air in the prior 24 hours rose 7%.

Extend the conversation through the power of social media

“Social platforms enable us to reach and engage new consumers, while also deepening the engagement of our best customers by fostering powerful viral communities,” George said.

Qurate Retail has built a network of influencers who can amplify HSN or QVC products and platforms with their followers. In addition, Qurate Retail has launched three social marketplaces – Ellie Sugar and Fuss Beauty in the U.S. and TILI (Try It Love It) in the U.K. – designed to reach beauty shoppers who may not be aware of the curated products and engaging experiences offered by HSN and QVC. The company also has launched its first skill on the Alexa platform, enabling users to watch or listen to HSN live and obtain information about HSN’s broadcast and products. By early 2019, users will be able to order products and check shipping updates and other account details, all via voice.

Enhance the service experience

<em>”We recently announced a multiyear plan to reduce delivery times by two days and increase package consolidation by integrating our HSN and QVC US fulfillment networks,” George said. “This is just one example of how we are investing to ensure that our service promise stays among the best.”

The plan to integrate the fulfillment networks was announced in October. The first phase includes opening a new fulfillment center in Bethlehem, PA in 2019, as well as anticipated closures of fulfillment centers in Lancaster, PA, Roanoke, VA, and Greeneville, TN in 2020.

Additionally, Qurate Retail will evolve toward a leased vs. owned model for many of its fulfillment facilities to increase flexibility and reduce longer term capital requirements.
Qurate Retail’s multiplatform approach is helping the company expand its customer base.

Over the past 12 months3, new customer counts for QVC US rose 4%, with 83% of new customers coming through digital platforms. QVC US also saw a meaningful shift among new customers to customers who are 18-44 years old. Overall, the QVC US customer base is up 2% year-to-date, with strong and stable customer retention.

HSN Jean Queen Diane Gilman Returns

November 15, 2018

HSN jean queen Diane Gilman, who has been off the air for about a year to be treated for breast cancer, is finally returning.

Gilman this week posted a video on Facebook saying that she will be back on HSN Nov. 17 with a Today’s Special. During her illness, Gilman’s line has continued been sold on HSN since her absence, with a host filling in for her on-air.

In the video you can see that Gilman has a whole new look following her cancer treatments. Gone is the big, frizzy long red hair. She is sporting short curly white-gray hair, and we think it looks great “post cancer,” as she puts it. She is four-months post chemo.

She noted that she received more than 130,000 supportive comments from well wishers the first two days after she announced she had cancer, and it was an inspiration to her.

Gilman, who got teary-eyed in the video, said she had continued to design but missed going on the air to talk to her customers.

We welcome her back, but ol’ New York accent and all.

And while we are at it, we see that HSN has taken a page from Evine’s book and is now introducing its TSs at 10 p.m., not midnight. Guess the Qurate overlords don’t want HSN’s Today’s Special debut competing against sister channel QVC’s Today’s Top Value, which bows at midnight.

Third Quarter: QVC Sales Up a Smidgen, HSN Down

November 12, 2018

Last week Qurate Retail, the parent of QVC and HSN, reported its third-quarter results. They are a bit complicated, because of an accounting change in the way Qurate accounts for revenue.

Here’s as best as we understand it: Qurate has adopting a new accounting standard, so QVC and HSN are now recognizing credit-card income for their branded credit cards as part of their net revenue “rather than as an offset to selling, general and administrative expense.”

That change will positively impact Qurate Retail’s revenue for 2018.

Here’s the deal: QVC’s revenue in the third quarter as up 3 percent — to $1.42 billion — when you include the $26 million in credit-card revenue. But it only rose 1 percent without it.

In HSN’s case, its revenue was down 4 percent — to $514 million — including its $3 million from credit-card revenue. But revenue dropped a whopping 5 percent without that added addition of funds.

Before we provide the official third-quarter details, we can also report back on what Qurate head honcho Mike George had to say on the third-quarter conference call with Wall Street analysts.

For those who were shocked to see QVC standards like Dooney & Bourke and Judith Ripka on HSN, expect more of such QVC-HSN crossovers, George said.

But so-called proprietary brands, like QVC’s Isaac Mizrahi, will not be making their way to HSN, according to George.

He also said that 100 new products are heading to HSN, and that the home shopping network will be getting its own new proprietary lines developed by the merged QVC-HSN department that will work on such projects for both channels. Previously at HSN, Joy Mangano’s company was devising a lot of that home shopping network’s own brands, like Iman.

And as reporters, we sympathized with the Wall Street analysts who asked a lot of questions but didn’t get many answers from George. For example, HSN apparently just did a new carriage deal with a distributor. Under questioning, George wouldn’t identify who that cable or satellite provider was.

Yet even as he ducked answering their queries, these analysts kind of groveled and thanked him for his non-answers.

As for the results that Qurate would talk about, in the third quarter QVC saw sales gains in accessories, beauty and electronics, which were partially offset by declines in home and jewelry.

“As noted last year, QVC US experienced a systems outage late in the second quarter of 2017, which resulted in an estimated 1 percent shift in net revenue to the third quarter of 2017,” Qurate said in its press release. “This outage negatively impacted revenue by approximately 1 percent in the third quarter of 2018 due to the comparability of results.”

Over at HSN, which will see its ranks decimated by layoffs that QVC announced last month, in the third quarter its “sales mix shifted to home, accessories and beauty from apparel, jewelry and electronics and resulted in an improved return rate,” according to Qurate.

HSN also paid $12 million in severance costs in the quarter.

“In the third quarter of 2017, HSN’s results were impacted by Hurricane Irma,” Qurate said. “At that time, HSN estimated that revenue was negatively impacted by approximately $13 million and adjusted OIBDA was negatively impacted by approximately $5 million.”

And here’s the big deal that George was so secretive about.

“Beginning in the third quarter of 2018, HSN is operating under a renewed carriage agreement with a certain distribution partner,” Qurate said. “This agreement provided for improved channel placement and broadcast in high-definition. Based on the terms of the renewed multi-year carriage agreement, HSN capitalized the upfront payment and is amortizing the amount over the life of the agreement, versus its previous convention of expensing the payment associated with the contract terms each quarter.”

“Our solid third quarter results demonstrate continued execution of our strategy to engage our customers with compelling products across multiple shopping platforms,” George said in a canned statement.

“We grew revenue and profitability at QVC US, improved HSN’s sales trend and customer engagement trends … We’re taking steps to more fully leverage the power of our US video commerce platform and accelerate our digital initiatives by combining QVC US and HSN into a new business unit, QXH, a move that we believe will yield new revenue opportunities and improved customer service, as well as operating efficiencies and incremental cost synergies. Qurate Retail is focused on leveraging its unique video commerce model in a retail market that increasingly values engaging mobile and social shopping experiences.”

QVC Host Sharon ‘Foodie’ Faetsch to Exit

November 8, 2018

QVC host Sharon Faetsch Wednesday announced that she is leaving the No. 1 home shopping network after 15 years there.

The host, who described herself as “your Foodie Friend” on Facebook, said it was her decision, but of course people are wondering if that is the case or if she was one of those caught up in the consolidation of QVC and HSN.

We wish we knew the inside dope, but we don’t.

Faetsch said that her kids are nine and 11 years old and she wants to spend more time with them.

She added that QVC “has been a wonderful place to work,” and said that her last show will be Nov. 21.

We wish her well.