ShopHQ Sees Sales Drop 5% In Second Quarter

ShopHQ this week boasted that its net income was up substantially in the second quarter compared with a year ago. But the bad news is that its sales dropped 5%, to $124.5 million.

The Minnesota-based watch and PPE shopping channel posted net income of $1.1 million, compared to a net loss of $10.2 million in the same period last year.

The channel said it launched 25 “exciting new brands” in the second quarter and 15 in the first quarter, “representing the highest number of new-product launches for any six-month period in the company’s 30-year history.”

Big whoop.

Revenue for these innovative new product launches generated 19% of ShopHQ’s total revenue for the first two quarters this year, which was the highest percent of new-product revenue during any six-month period in the network’s 30-year history.

The second quarter debuts included: GH Bass Footwear; DKNY Fashions; Karl Lagerfeld Paris; Guess Handbags; Fossil Handbags; Oakley Sunglasses; Dolce & Gabbana Eyewear; Elan Fashions; Heather Dubrow’s Closet; Gucci Fragrances; Prada Fragrances; Estee Lauder Fragrances; Melanie Mills Skincare; Foreo Beauty Tools; Lladro Collectibles; Spode Dinnerware; SeaBear Crab; Glenda’s Kitchen; Coin Shoppe; Tiller and Hatch; Wagner Home Improvement; Ladders Nutrition by Lebron James & Arnold Schwarzenegger; Sankom Shapewear; Bee Alive Royal Jelly; Radiant Greens; and Foligain Hair Health.

ShopHQ bragged that its viewership is increasing, “driven by its static programming calendar strategy introduced in the final quarter of 2019.”

For example, “‘Fashion Talk with Fatima & Kathy’ on Mondays and Thursdays, and Invicta Collectors Room on Thursdays, both achieved double-digit viewership growth year-over-year in Q2,” ShopHQ said in its press release.

Guess what? When we were covering the cable TV industry for Multichannel News, a QVC exec told us that viewership doesn’t really matter for home shopping networks: How much customers are buying does.

Anyway, here’s ShopHQ CEO Tim Peterman’s spin on the situation.

“One year ago, we defined a new innovative interactive media strategy and began to implement it within a leaner, more entrepreneurial culture,” he said. “Today’s financial report card reflects that success – smarter decision-making by a smaller group of entrepreneurial employees who love operational discipline and calculated risk taking.”

QVC Goes 10K For Gold Rush, We No Likey

We guess we are snobs, but so disappointed that QVC’s TSV for the Gold Rush is in 10 carat gold.

Yes, the price of gold has spiked.

Still, not digging the new Denary line.

Third Amigo Michael Valitutti Exits ShopHQ

First it was Paul Deasy. Then it was Chuck Clemency. Now the third and final of the Three Amigos is gone from ShopHQ.

We had read and heard various reports about whether or not jewelry vendor Michael Valitutti was going to remain on the home shopping channel, what was going to happen to his Gems en Vogue line, etc.

But Michael seemed to put the rumors to rest with a post on Facebook.

“I am NO LONGER appearing on ShopHQ,” he wrote. “All my Gems en Vogue jewelry is no available at gemsenvogue.com. We supply direct-to-consumer pricing with FREE shipping and handling on any order that totals $75 or more with a THREE YEAR warranty. We have weekly deals, etc.”

We will be checking it out.

QVC Laid Off 450 Employees in July Blood Bath

Praise be. It looks like QVC and HSN combined had a decent second quarter financially. Oh, and they laid off 450 employees, including some of our favorite hosts.

Revenue for QxH, which is the two home shopping channels combined, increased 7% to $2 billion compared with the year-ago period, Qurate Retail Group reported this week.

Buried in the press release, however, were the first solid numbers about how many people QVC pink-slipped last month, including folks like host Antonella Nestor. We’ve blogged about the layoffs but didn’t have a confirmed number on the total.

Qurate said it “took a variety of actions to simplify and streamline its operating structure as it accelerated its strategic plan and incorporated key operational learnings from its COVID response.”

So what did it do?

“This necessitated separating with approximately 450 team members in July, incurring $20 million of severance costs in the second quarter,” the heartless company said. “Qurate Retail also closed QVC customer contact centers in San Antonio, Texas, and Chesapeake, Virginia, and the Zulily customer contact center and digital studio in Gahanna, Ohio, as the businesses shifted to permanent work from home positions in those locations.”

There you have it.

Here’s what else Qurate’s fearless leader had to say.

“We generated strong growth in revenue, OIBDA, and free cash flow in the second quarter, with every business unit and geographic market achieving meaningful sales gains and significant new customer additions,” Qurate President and CEO Mike George said in a canned statement.

“Our agile teams responded to the ongoing shifts in consumer needs during this challenging time to deliver engaging and relevant experiences across our e-commerce, video and social platforms,” he said.

“While economic uncertainty remains, our recent results give us confidence that we can generate sustained growth by continued execution of our strategies to offer unique differentiated products and immersive and trusted shopping experiences across all the digital platforms relevant to today’s consumer, while keeping the health and well-being of our team members and communities our top priority.”

The parent company also addressed workplace changes stemming from the pandemic.

“Team members who can work from home will continue to do so, until at least early 2021, with some working from home permanently,” Qurate said. “Social distancing, mandatory mask requirements and stringent safety and sanitation protocols are in effect at all sites. Qurate Retail provided special pay and work from home allowances and continues to provide leave, medical and other benefits.”

QxH, which again is QVC and HSN, reported revenue growth in the home, electronics and beauty categories, which were partially offset by declines in apparel and jewelry.

Product margins decreased primarily due to category mix shifts and pricing and promotional offers early in the second quarter.

Gross margin decreased primarily due to higher fulfillment (warehouse and freight) costs mainly associated with COVID-related premium pay in its fulfillment centers, lower productivity due to COVID-related protocols, reduced pack factor and general freight rate increases.

These factors were partially offset by favorable customer returns.

Operating income and adjusted OIBDA margin were also impacted by $9 million of incremental severance expense, higher marketing expense and incentive compensation accruals, partially offset by favorable TV commissions.

ShopHQ To Launch Health Network

ShopHQ, which brought you the Bulldog Shopping Network, is launching a health network next month. Just in case you weren’t seeing enough of the Dubrows.

We guess we should have seen this coming, but we didn’t. ShopHQ Tuesday announced that ShopHQHealth will debut Sept. 1. It will be available in about 15 million homes across 100 markets ranging from New York to Los Angeles.

ShopHQ bills this new offering as its second niche television network “to leverage the product strengths of its flagship network, ShopHQ.”

The press release says, “The company launched Bulldog Shopping Network last October to capitalize on its unique strength in television retailing for men and women who enjoy shopping for the men in their lives.”

ShopHQHealth “will leverage the strength of ShopHQ’s existing proprietary health brands ‘Safe Living with Dr. Terry Dubrow,’ ‘Medic Therapeutics,’ and ‘Consult’ to provide a new 24/7 network offering a robust assortment of products and services dedicated to addressing the physical, spiritual and mental health needs of its customers and their families,” according to the announcement.

“Launching ShopHQHealth is a logical next step for iMedia,” ShopHQ CEO Tim Peterman said in a canned statement. “Health and wellness is more than a category for us. It is a passion and our customers feel that. Our new network will pioneer the independent 24/7 platform that this category deserves. I can’t be more optimistic about the marketplace opportunity of health and wellness for products and services.”