ShopHQ’s Third-Quarter Revenue Drops 13%

In other ShopHQ news that we never got wind of last week, the No. 3 home shopping channel reported its third-quarter earnings. Not a pretty picture.

It posted net sales of $115 million, down about 13% from $132 million in the year ago-period.

On the bright side, the network is bleeding less red ink. It lost $6.7 million in the third quarter compared with $9.2 million a year ago.

ShopHQ also boasted that it had launched its male-targeted home shopping channel, the Bulldog Shopping Network. Where it launched, we have no idea.

ShopHQ also said it has struck exclusive relationships with with seven new home and fashion brands: John O’Hurley, Heather Dubrow, Romero Britto, Danny Seo, Heather Hall, Bear Creek Cattle Steaks and Leota Fashions. The network also cited its deal with Shaquille O’Neal, who will be doing a live show.

“I want to explain the significance of our Shaquille O’Neal partnership announced yesterday,” Tim Peterman, CEO of ShopHQ parent iMedia Brands, said in a statement. “Specifically, why we worked so hard to make this happen and why we believe the size of this opportunity is significant.”

Peterman continued, “First and foremost, Shaquille O’Neal is more than a celebrity to iMedia. We know him. We know his work ethic, what kind of partner he will be and how good of an entertainer and entrepreneur he is. That is the ‘why.’ He’s that rare, authentic personality who has grown beyond his achievements to become a pop culture icon.

“iMedia estimates the size of the financial opportunity here to be meaningful. Shaq’s iconic status combined with iMedia’s television and e-commerce retailing expertise create a unique opportunity for iMedia to build a profitable, omni-channel business that iMedia believes could exceed $200 million in annual revenues.”

Then Peterman got into the bad news.

“Regarding our operating results, prior to my arrival in May, the revenue decline for the previous six months was 17.2%,” he said.

“During these past six months, we successfully reduced that decline to 12.7%,” Peterman said. “We accomplished this by launching multiple exciting brands, making important staffing changes, simplifying the promotional framework and introducing an innovative loyalty program. Although the revenue decline did slow, it did not slow as fast as we wanted. The reason was the merchandising effort in the company was more troubled prior to my arrival than previously expected, particularly in our two long-lead businesses of Home and Fashion.”

Here are some other bullet points from the third-quarter results:

* Net sales decline driven by assortment pressure in the long lead time businesses of Home and Fashion & Accessories, which required an over-reliance on the Jewelry & Watches category.

* Subscription sales increased 10%, reflecting strong loyalty within the Beauty & Wellness category.

* Gross margin in the third quarter increased 30 basis points to 36.1% compared to 35.8% in the year-ago quarter. The improvement was driven by a strong discipline to increase rates, which helped to offset slight product mix pressure.

* The return rate for the quarter was 19%, a 90-basis point year-over-year improvement driven by return rate reductions within the Watches, Fashion & Accessories and Consumer Electronics categories.

* Average selling price increased 5% to $66 driven by increases in the Jewelry and Home & Consumer Electronics categories, combined with a mix shift into Jewelry & Watches.

* Operating expenses decreased 15%, or $8.1 million, year-over-year to $47.4 million, reflecting decreases of $9 million in distribution and selling expenses and $800,000 in general and administration expenses, partially offset by a $1.5 million increase related to restructuring costs.

He’s No David Venable: Shaquille O’Neal To Debut ‘In the Kitchen with Shaq’ on ShopHQ

We are way behind in our blogging when it comes to ShopHQ. In our defense, we had been on the email list for all of the shopping network’s press releases. But all of a sudden we mysteriously stopped getting them, like this juicy tidbit about a fellow New Jersey native.

ShopHQ has announced it had struck a deal for basketball great Shaquille O’Neal, who is from Newark, to host a live program, “In the Kitchen with Shaq,” as well as reaching a product partnership for a collection of kitchenware, cookware, and grill products.

“In the Kitchen with Shaq” is set to broadcast live, starting next year, as a weekly one-hour program hosted by the Hall of Famer. It will feature “Shaq-approved” kitchen, and cookware essentials.

Who does he think he is, George Foreman?

“In the Kitchen with Shaq” will originate from Atlanta and is confirmed for 30 live broadcasts.

“I’m so excited to partner with ShopHQ on ‘In the Kitchen with Shaq,’” O’Neal said in what was definitely a canned quote.

“Nothing brings people together like food and my new collection features top-of-the-line kitchen necessities that anyone can use to prep, cook and serve their favorite recipes,” he said. “I can’t wait to unveil it on ShopHQ®.”

ShopHQ CEO Im Peterman chimed in, “Shaquille’s business acumen has no bounds, and we know that his fan base will be excited not only to see Shaq on their television screens but also in their kitchens.”

We have written about O’Neal in our day job, because he has invested in several real estate projects in his hometown, Newark.

Here’s the boilerplate on O’Neal:

Shaquille O’Neal is one of the world’s most successful athletes-turned-businessmen, whose accomplishments both on and off the court have translated into a highly sought-after consumer brand. As a business mogul, sports analyst, DJ, restaurateur, and brand ambassador, O’Neal’s unique “Business of Fun” mantra resonates throughout each of his countless endeavors.

The 15-time NBA All-Star’s unprecedented athletic career spanned nearly two decades and earned him countless awards and honors, including NBA Most Valuable Player, NBA Rookie of the Year, four NBA Championships and a First Ballot NBA Hall of Famer. Currently, O’Neal is an analyst on TNT’s Emmy Award-winning Inside the NBA, and will be premiering his life chronicling reality series, Shaq Life, in 2020.

O’Neal, who has a PhD in Leadership and Education, gives back through a number of annual philanthropic programs including Shaq to School, Shaqsgiving, and Shaq a Claus.

The debut of his Los Angeles restaurant, Shaquille’s, along with his Las Vegas eatery, Big Chicken, has further elevated Shaquille’s tycoon status he has positioned him as a successful restaurateur. A second Big Chicken location is slated to open in Glendale, CA and will debut at sea on Carnival Cruise Lines Radiance and Mardi Gras.

ShopHQ Starts Selling CBD Products

ShopHQ, the first home shopping network to hawk vibrators, has taken another pioneering step in electronic retailing. The channel is now selling CBD-infused products.

ShooHQ had a show dedicated to CBD topical lotions and creams last night.

https://www.shophq.com/search/?q=cbd&icid=InternalSearch_Default_cbd

We got a crash course on CBD during our day job a few weeks ago, when we wrote a story on what claims to be the first national CBD coffee shop planning to open in our hometown of Montclair, NJ.

https://product.costar.com/home/news/shared/1643915440

Here’s a summation of what we learned:

* CBD stands for cannabidiol, the nonpsychoactive ingredient found in large quantities in hemp and small quantities in marijuana that’s said to promote relaxation, heal pain and reduce inflammation.

* National retailers such as Walgreens are starting to sell CBD-related products, such as topical creams.

* Hemp has been described as “a cousin of the marijuana plant,” and hemp and marijuana both have CBD as one of many components.

* The U.S. government legalized hemp cultivation nearly a year ago, but federal regulations for the retail sale of CBD-infused products meant for human consumption haven’t been promulgated yet.

We tried CBD drops ourselves to relieve stress. It was a very low dosage, too low to have an impact, we think.

But we plan to try it again, and applaud ShopHQ for going out a bit on a limb to start selling CBD products.

QVC Is Offering Maternity, Baby Clothes

QVC has gotten into the baby business.

The No. 1 home shopping network is now selling maternity clothing as well as baby clothes.

The maternity apparel is from the collections of Stowaway, Blooming Women and NJDJ, and we think they look very stylish.

https://www.qvc.com/catalog/search.html?keyword=maternity+clothing

They range from “executive dresses” to jeans to hospital gowns to nursing dresses.

QVC.com also has a few items for infants and toddlers, including a swaddle sack.

https://www.qvc.com/Swaddelini-Soft-and-Stretchy-Swaddle-Sack.product.A436836.html?sc=SRCH

There is also baby apparel from the well-known adult clothier Barefoot Dreams and a brand called Peace Love World.

https://www.qvc.com/catalog/search.html?keyword=infant+clothing

We always like to see home shopping networks branch into new categories, so maternity and infants appear to be a good thing.

But with the added cost of shipping, we wonder if moms and dads will find home shopping too pricey for their kids’ duds.

We bought a bra from QVC for $28, and had to send it back for $5. That kind of a purchase is a waste of money and just plain stupid on our part.

QVC, HSN Sales Decrease 4% In Third Quarter

The tough times keep coming for QVC and HSN, which are both owned by Qurate Retail Inc.

In the third quarter revenue for QxH, the two home shopping channels combined, dipped 4% to $1.9 billion, Qurate reported Monday.

QxH saw sales declines in jewelry, accessories and home, which were partially offset by gains in beauty and apparel, according to Qurate.

“The third quarter was challenging, with continued sales and Adjusted OIBDA pressure at QxH and Zulily,” Mike George, president and CEO of Qurate Retail, said in a statement.

“However, we were pleased to see Cornerstone’s continuing operations turn to growth and a further acceleration of growth at QVC International,” he said. “Despite the sales pressures, we generated strong growth in free cash flow. As we look ahead, we are intensely focused on improving our operating results, accelerating synergy capture and better positioning our companies for a changing retail and media world, while sustaining strong cash flow.”

QxH experienced lower TV distribution commissions and higher product margins.

Lower TV distribution commissions were in part associated with the accounting treatment for certain renewed HSN carriage agreements, as well as favorable renegotiated rates at HSN.

Beginning in the third quarter last year, HSN began renewing TV carriage agreements with certain distribution partners, which provided multi-year upfront payments that are amortized over the life of the agreements, versus its previous convention of expensing quarterly payments as incurred.

Indigo Moon Rises Again At ShopHQ

It was a flash from the past. A few days ago we saw that ShopHQ is now selling the Indigo Moon clothing line.

Way back when QVC used to sell this apparel, and we bought quite a bit of it then.

It has a patch-worky, homespun kind of look, like something you would find in a boutique, not in a traditional department store. The pieces always looked so original.

Nothing struck our eye on ShopHQ, but we were glad to see Indigo Moon pop up again.

Jewelry Designer Barbara Bixby Will Be A No-Show At QVC

Another veteran QVC vendor has decided to no longer make that long, lonely ride to West Chester to do on-air product presentations.

You won’t be seeing jewelry designer Barbara Bixby, whose creations are divine, on the Q any more. We found out about it not via Barbara, but through a third-person Facebook post on “Barbara Bixby Designs.”

The post said “Deciding not to do on-air presentations at QVC was one of the hardest decisions she has ever had to make but after 20 years it was time to do the things that is also passionate about as well as continuing with her jewelry.”

The post said Barbara will continue to sell her creations on QVC.com as well as BarbaraBixby.com.

Recently fashion designer Louis Dell’Olio, who lost his wife and sometime-QVC model to cancer a few years back, also announced that he would no longer be doing on-air presentations.

We don’t blame these folks for not wanting to trek to QVC. We did it once, and it is a hike. But we enjoy listening to creators, especially people like Barbara, explain the inspiration for their work.

And with this development, we quite frankly wonder how long Barbara’s jewelry will continue to be sold on QVC.