Ta-Da: HSN Rolls Out HSN Arcade, A Gaming Portal

HSN is playing games with us.

Wednesday it launched what it called a “new platform (that) will allow people to play their favorite games online while simultaneously watching HSN streaming live in HD, viewing the item currently on-air and quickly shopping the last 15 items aired…all on one screen. In addition, HSN Arcade will integrate with Facebook to allow players to easily share their scores and achievements with their Facebook friends.”

Got that?

HSN Arcade is an e-commerce channel that uses “gamification” — a new word on us– by connecting unique products with gameplay, including the Today’s Special.

Players can apparently win prizes, including the Today’s Special product or a gift card, by being the fastest to complete the daily “Today’s Special Jigsaw Puzzle” and receiving the best score. People will also be able to participate in tournaments with HSN’s celebrity guests, hosts and other players for the opportunity to win other prizes, such as gift cards and products. Winners can be revealed in real time on TV, online and mobile.

“The launch of HSN Arcade is a strategic move to further differentiate the HSN shopping experience…by combining what people currently do online more than any other activities: shopping, gaming and sharing,” Jill Braff, HSN’s executive vice president of digital commerce, said in a canned statement. “We are also excited to be using Facebook integration to allow players to post their achievements and their favorite HSN products seamlessly to their Facebook wall. Other sites have game arenas, but only HSN marries content and commerce in such an innovative way.”

The combination of shopping, social and gaming taps into customer behavior, HSN said in a press release Tuesday.

According to a Newzoo (say what?) survey, currently more than 140 million people play casual games online, which represents 66 percent of the U.S. online population.

“The addition of this platform to HSN’s highly trafficked site and loyal customer base will extend HSN.com as an online destination ” — or so the No. 2 home shopping network hopes. .

HSN Arcade will host 25 games, including the Today’s Special Jigsaw Puzzle and Lights! Camera! Subtraction! (featuring HSN’s celebrities), as well as Crossword Puzzles, Word Search, Mahjongg, Sudoku, Treasure Hunt, Blackjack and more. The games are free to play. The experience will be further enhanced with the ability to share games, leaderboard rankings, badges and scores with friends using Facebook integration.

HSN partnered with entertainment agency WME to help frame the gaming opportunity with external vendors and serve in a strategic role in evaluating proposals. Arkadium, a leading provider of game solutions, was selected to develop HSN Arcade. Additional games will be created and launched based on feedback and demand from people.

HSN Terminates $1.3 Million Merchandising Chief Lynne Ronon, But It’s ‘Mutual’

Those sly pusses at HSN. They waited until after 5 p.m. today to announce that they have parted ways with Lynne Ronon, the network’s executive vice president of merchandising.

HSN filed an 8-K with the Securities and Exchange Commission Wednesday that disclosed the news.

“Efective May 18, 2011, Barbara Lynne Ronon and HSN, Inc., a Delaware corporation (the ‘Company’), mutually agreed to end Ms. Ronon’s employment with the Company,” it said. “The Company and Ms. Ronon have agreed to treat this as a termination without ‘Cause’ under the Company’s Named Executive Officer and Executive Vice President Severance Plan which was previously filed with the U.S. Securities and Exchange Commission.”

Last year Ronon received $1.3 million in compensation from HSN. We assume she banked at least someo of that for a rainy day.

It looks like another big move by HSN CEO Mindy Grossman, the Terminator.

Call Us Crazy, But If ShopNBC’s Sales Jumped 15 Percent, How Come Losses More Than Doubled?

ValueVision Media, aka ShopNBC, posted a whopping 15 percent increases in its first-quarter net sales, to $143.5 million from $125 million, the home shopping network reported Wednesday.

That’s the good news. The bad news was that unless our eyes are deceiving us, ShopNBC’s net loss in the quarter was $28.9 million, more than double the loss in the year-ago period. But the operating loss was only $630,000, versus $9.1 million a year ago.

ShopNBC also reported that: Adjusted EBITDA increased by $7.4 million to $3.1 million; gross margin rose to 37.2 percent versus 36.6 percent in the year-ago quarter; and Internet-sales penetration increased to 44.9 percent.

“ValueVision started fiscal 2011 with another quarter of solid progress across our multichannel business, led by strong sales and margin growth and our third consecutive quarter of positive adjusted EBITDA,” ShopNBC CEO Keith Stewart said in a canned statement. “In addition to strong merchandising and operational execution, we also strengthened our capital structure and enhanced our financial flexibility through the early redemption of our 12 percent preferred stock with proceeds from the sale of 9.5 million common shares.”

Apparently not knowing when to stop when he’s ahead, Stewart added, “We also continued to build our talent pool across key areas of the company, adding four proven interactive retail veterans to our team. Annette Repasch, a multichannel retailing executive of 25 years, joined us to oversee merchandising strategy and product development for Jewelry & Watches, Health & Beauty, and Fashion & Accessories. We also added three industry veteran
strategic advisors to focus on major IT, process engineering, merchandising and customer service initiatives. The ShopNBC team is key to our future, and we are executing on an exciting road map to drive improved performance.

“Plans for the remainder of this year are centered around an impressive line-up of new product, top brands, and compelling
promotions to drive new and active customer growth. We will also be focused on further increasing our Internet sales penetration toward 50 percent as well as refinancing our long-term debt with lower interest rates.”

The first-quarter net sales reflected strong performances across the Jewelry & Watches and Home & Electronics categories, in addition to solid momentum in the Health & Beauty segment. Fashion &

Accessories is still early in its repositioning, though it achieved some well-received first-quarter brand launches, according to ShopNBC.

Strong customer response to higher-priced items, including big-screen TVs, mattresses and certain jewelry offerings contributed to a slight uptick in average selling price in the quarter, as well as a more modest increase in units shipped and an expected increase in return rates.

ShopNBC president Bob Ayd chimed in.

“Q1 saw a continuation of the trends that drove strong Q4 results and provide our business with a more balanced and resilient platform,” he said. “In addition, we had more merchandise variety across key product categories and saw benefits from several national brand introductions, including Simmons mattresses, Sur La Table kitchenware, and Anne Klein fashion accessories. This ever-expanding array of quality products and unique offers helped drive customer activity and sales gains in Q1.”

Yada, yada…

“Looking ahead in 2011, we can’t help but be optimistic. We have a more established and robust business, strong senior leadership, a growing base of popular products and brands, a healthy balance sheet, and a growing track record of success. All of these factors are proving beneficial in our efforts to both delight our customers as well as to attract exciting new vendors and product exclusives.”

We Don’t Know Nuthin’ From Country Music, But Randy Travis Will Perform And Launch His New CD On HSN May 27

Country artist (is that a contradiction in terms?) Randy Travis will celebrate 25 years of “chart-topping hits,” HSN told us Wednesday, with the exclusive world launch of his latest CD May 27.

The country music icon will perform live on HSN a special one-hour primetime show at 9 p.m. as part of HSN’s first-ever 24-hour Americana Event featuring unique American-themed experiences, brands and products.

“Offering our customers a shopping experience that is both entertaining and relevant is at the core of what we do,” Sandy Conrad, HSN’s senior vice president of merchandising, said in a canned statement. “We’re excited to have Randy Travis kick off Memorial Day weekend and be a part of HSN’s first-ever Americana event.”

HSN junkies can be the first to order a special 2-disc bundle ($14.95) that includes Randy’s new “Anniversary Celebration” release and his best-selling Top 10 greatest-hits CD.

“Anniversary Celebration” includes new songs and remakes such as “Forever and Ever Amen,” featuring the Zac Brown Band; “He Walked On Water,” in partnership with Kenny Chesney; “Can’t Hurt A Man,” featuring Tim McGraw; and “Is it Still Over?,” accompanied by Carrie Underwood.

Canned bio:

Randy Travis is one the most recognizable voices in music with more than 20 million records sold and eighteen No. 1 singles. Other acclaimed artists joining Travis on his first-ever duets CD include Brad Paisley, Willie Nelson, Kris Kristofferson, George Jones, Jamey Johnson, Alan Jackson, Don Henley and Kristin Chenoweth.

The special CD bundle will be available at HSN, hsn.com and via HSN Mobile for $14.95. Travis fans can go to http://www.hsn.com, keyword: Randy Travis, beginning Friday to purchase the CD set, and even send well wishes to Randy for his May 27 HSN debut.

In addition to this special anniversary CD bundle, HSN will also offer an exclusive, limited-edition, Gibson Epiphone guitar with a commemorative 25th anniversary, hand-signed Randy Travis plaque…”a perfect gift for Father’s Day,” according to HSN.

Not for our dad. He got thrown out of the Grand Ol’ Opry when he was down South in the service. We think he was heckling a “country artist” after one too many cocktails.

Anyway, Travis fans can get a taste for what life is like on tour with Randy and his band with “Cooking Memories On the Road,” a cookbook written by Randy and Elizabeth Travis. The book will be available on hsn.com and feature tidbits and personal photos from Travis’ numerous tours, as well as more than 100 recipes the country star gathered during his travels.

QVC Posts 3 Percent Revenue Gain In First Quarter, Takes $24 Million Hit In Japan From Quake

QVC posted good first-quarter results, with its revenue rising 3 percent to $1.2 billion, the home shopping network’s parent Liberty Media reported Friday. But the company took a hit in its Japanese network because of the earthquake and tsunami.

In the United States, sales of electronics, beauty and accessories increased while jewelry sales declined.

The average selling price for QVC items in the first quarter increased 7 percent from $51.16 to $54.83, while total units sold decreased 3 percent to 24 million. Returns as a percent of gross product revenue decreased from 18.6 percent to 18.2 percent for the quarter.

QVC.com sales as a percentage of U.S. sales grew from 32 percent in the the year-ago period to 36 percent in the first quarter.

Adjusted OIBDA was relatively flat, negatively impacted by $10 million for the quarter due to the change in terms of QVC’s arrangement with GE Money Bank for its QCard that was effective in August 2010 as previously disclosed.

Excluding the negative impact of this arrangement, U.S. adjusted OIBDA increased 3 percent for the first quarter. The U.S. adjusted OIBDA margin decreased 77 basis points to 21.8 percent for the quarter primarily due to the previously disclosed change in our QCard arrangement and a decrease in initial margins due to growth in electronics.

QVC’s consolidated revenue, which includes its international channels, increased 4 percent in the first quarter to $1.8 billion and adjusted OIBDA decreased less than 1 percent to $363 million.

Here is QVC president and CEO Mike George’s canned statement:

QVC drove solid revenue growth of 4 percent against a challenging prior year comparison. While our consolidated adjusted OIBDA declined slightly from the prior year, this was driven by three extraordinary events: our Italy start-up, the change in our QCard program with GE Money Bank and the impact of the tragedies in Japan.

In the U.S., our 3 percent revenue growth in the first quarter contributed to a 14 percent two-year growth rate, placing us among the faster-growing large retailers in the U.S.

Exceptional revenue growth from new customers and eCommerce, inclusive of mobile, in the U.S., Germany and the UK, are the leading factors in this quarter’s performance. We are committed to creating highly immersive shopping experiences with differentiated products, engaging personalities, high levels of community involvement and simultaneous engagement over multiple platforms – an experience that cannot be replicated by either store based or Internet retailers.

A perfect example of this was March’s Red Carpet event celebrating the Oscars, where we engaged our customer over multiple platforms through the creation of behind the scenes video blogs, contests on Facebook and QVC.com and live streaming tweets.”

The March 11 earthquake and related disasters in Japan put QVC Japan off-the-air for 12 days. The distribution center suffered moderate damage. QVC maintains insurance coverage for property damage and certain business interruption circumstances, subject to roughly $12 million deductible.

QVC has not yet determined the complete financial impact of the property damage, the impact to its future operations or the value, if any, of a related insurance claim. Due to the nature of the events that caused QVC Japan to suspend its operations for a time in March, QVC estimates that about $24 million in revenue was lost based on prior-year revenue during the same period.

Since QVC Japan has resumed its broadcast, sales have been running about 10 percent below prior year sales, due to the disruption in the country.

“We cannot determine at this time when QVC Japan will return to sales levels we were experiencing before the earthquake and related disasters in Japan,” QVC said. “Additionally, management enacted a temporary employee pay policy to continue to pay employees during the off-air period, effectively causing QVC Japan’s variable labor costs to be fixed for a period of time. These events described above negatively impacted QVC Japan’s and QVC’s consolidated adjusted OIBDA margin.”

Despite the Japan tragedy, QVC’s international revenue increased 7 percent in the first quarter to $643 million including the impact of unfavorable exchange rates in Germany and Italy and favorable exchange rates in the UK and Japan. International adjusted OIBDA decreased 2% to $103 million for the quarter.

QVC Japan’s revenue and adjusted OIBDA decreased 9 percent and 19 percent, respectively, in local currency for the quarter due to the suspension of operations related to the earthquake and related disasters. In addition, the results were impacted by QVC’s decision to pay all employees during the off-air period and the negative leverage impact of QVC’s fixed fee broadcasting distribution arrangements. QVC Japan also contributed close to $2 million to local charitable restoration efforts.

HSN Sees Slight Sales Rise, Just 1 Percent, In First Quarter

Pardon us for being late with this report, but we were up until 2:30 a.m. covering and writing up a Montclair Township Council meeting. Duty called.

While we still in bed sleeping this morning, HSN reported that its net sales increased 1 percent, to $526.2 million, following comparable sales growth the prior year of 9 percent. Not exactly a great first quarter, it seems to us.

The sales growth, such as it was, was driven by electronics and fashion, partially offset by lower sales in fitness and housewares.

HSN.com sales increased 7 percent over the prior year’s increase of 15 percent and represent 33.2 percent of HSN’s net sales, up from 31.6 percent in the prior year.

Average price point and units shipped increased 4 percent and 1 percent, respectively.

“The return rate increased 250 basis points primarily due to higher than anticipated returns of certain electronics sold in the fourth quarter of 2010 and changes in product mix,” HSN said.

HSN’s gross profit increased 3 percent to $177.2 million. The increase was primarily attributable to decreased shipping costs due to a new outbound shipping contract.

Adjusted EBITDA increased 4 percent to $52.2 million compared to $50.3 million in the prior year. The increase was due to the 3 percent increase in gross profit, partially offset by a 3 percent increase in operating expenses, excluding non-cash charges.

Operating income was $40.8 million versus $39.3 million in the year-ago period.

“Our focus on maximizing performance through innovative product launches and events, strategic partnerships and increased digital efforts led to HSNi sales growth of 6 percent, e-commerce sales penetration of 40 percent and an Adjusted EPS gain of 14 percent,” HSN CEO Mindy Grossman said in a canned statement.

“We are committed to positioning our business for long-term success by delivering on our strategy of offering unique products and experiences, deepening customer engagement and accelerating e-commerce growth across the portfolio,” she said.

Mmmmmm….no glowing words specifically about HSN, the home-shopping network piece of the business.

We’ll try to catch a replay of the conference call later.

Sur La Table Coming To ShopNBC Monday, Dragging Along QVC Vet Bob Bowersox

National kitchenware retailer Sur La Table, who we know from Kierland Commons in Scottsdale, will be debuting on ShopNBC Monday.

“Never before seen on TV retailing,” as the press release says, the Sur La Table Kitchen Show will feature the retailer’s namesake line of kitchenware and gadgets, including exclusive Cuisinart appliances, to the delight of ShopNBC’s loyal viewers, who are sure to get everything they need to make the kitchen the center of their home.

As part of the premiere, The Sur La Table Kitchen Show will include cookware, bakeware, gadgets, cutlery and table settings
as well as exclusive, brightly colored Cuisinart appliances including mixers, food processors, blenders and more.

Sur La Table guest expert Jacob Maurer with be showing off the latest innovations and technology in kitchen appliances as well as unique and exclusive items including knives, kitchen tools and tableware.

In addition, ShopNBC culinary expert and cook book author Bob Bowersox — a QVC retread — will launch The Sur La Table Show premiere with a “Today’s Top Value” offer: The Sur La Table 10-Piece Hard Anodized Cookware Set with Bonus Cookbook, a $435 retail value available for $176.54 on that day only.

For more than 20 years (many of them at QVC, which ShopNBC fails to mention). Bowersox “has entertained households across America with his extensive knowledge, down-to-earth charm, and helpful presentations of kitchen innovations and appliances. From showcasing the latest in time-saving gadgets to sharing his own personal recipes, Bob’s kitchen know-how and advice gets viewers cooking with surprising and delicious results,” according to ShopNBC’s press release.

“We are thrilled to bring the premium brand of Sur La Table and its unique brand experience live to our customers,” ShopNBC president Bob Ayd said in a canned statement. “With a heritage of over 30-years, Sur La Table’s debut will entice cooks from all walks of life to interact with ShopNBC and shop a broad assortment of classic kitchenware and unique gadgets. We look forward to adding new flavor to their dedication to culinary diversity, innovation and authenticity — all at exceptional product and presentation values.”

“We’re excited to partner with ShopNBC on the premiere of The Sur La Table Kitchen Show,” Jacob Maurer, vice president of merchandising Sur La Table, we assume. “We are delighted to bring our passion for cooking and artful entertaining to the ShopNBC customer.”

ShopNBC To Report First-Quarter Earnings May 11

ValueVision Media, dba ShopNBC, will release its first-quarter financial results before the market opens May 11, the company said Thursday.

The home shopping network will host a conference call and simultaneous webcast at 11 a.m.

Participating in the call will be CEO Keith Stewart, President Bob Ayd and Chief Financial Officer Bill McGrath.

Both the call and webcast are open to the general public.

ShopNBC Redeems Stock For $40.9 Million, Undecipherable Financial Stuff On Keith Stewart

ValueVision Media, aka ShopNBC, said Wednesday that it has redeemed all of its outstanding 12 percent Series B Redeemable
Preferred Stock for $40.9 million and has paid all accrued Series B Preferred dividends, amounting to $6.4 million. The preferred stock was held by GE Capital Equity Investments.

The preferred stock redemption eliminates $17.5 million in future dividend payments. The redemption was funded by proceeds from the recent sale of 9,487,500 shares of common stock at $6.25 per share (including full exercise of the over-allotment option). Net proceeds from the offering, after commissions and offering expenses, were $55.6 million.

ShopNBC CEO Keith Stewart

Additionally, $8.3 million of the offering proceedsare available to ValueVision for working capital and general corporate purposes.

As a result of the preferred stock redemption, ValueVision will incur a one-time, non-cash charge of $24.5 million in Q1 2011, representing accelerated amortization of the preferred stock discount. This expense would otherwise have been realized over the remaining term of the preferred stock, which was required to be redeemed in February 2013 (30 percent and February 2014 (70 percent).

ShopNBC CEO Keith Stewart said, “The recent stock offering achieved several important objectives that support our growth goals. We strengthened our balance sheet and financial flexibility by removing the high cost Series B Preferred from our
capital structure, thereby eliminating $17.5 million in futuredividend payments. We also expanded our investment community
visibility and base of shareholders, supporting the long-term liquidity of our shares.”

Chief financial officer Bill McGrath said, “A major driver in our decision to redeem the preferred at this time was to eliminate the
cash sweep covenant requiring excess cash balances be used to pay down preferred obligations. The elimination of the sweep provides us with greater financial control and flexibility to invest future cash flows to support our growth.”

As contemplated in the company’s March 30, 2011 offering prospectus, ShopNBC clarified that Stewart may sell up to, but no more than, 500,000 shares of common stock within the next 90 days.

Stewart has beneficial ownership of 1,881,155 shares of common stock, 1,000,000 stock options (583,333 of which are currently vested) and 72,545 restricted stock units (vests 50 percent over two years) representing a total of 2,953,700 million common share or share equivalents.

His contemplated sales represent up to 16.9 percent of his total holdings and are being pursued principally for the repayment of borrowings that funded his open market purchases of ValueVision stock in 2009.

We Guess She’s Not A Hard Liner: ShopNBC Hires QVC Veteran As VP Of ‘Soft Lines’

ShopNBC Wednesday named QVC veteran Annette Repasch vice president of soft lines, effective May 2. Soft lines? What the heck!

She will report directly to ShopNBC president Bob Ayd.

We don’t have a photo of her or of the other exec that ShopNBC appointed this week. Apparently the No. 3 home shopping network is not springing for head shots these days.

We had to run this photo of ShopNBC president Bob Ayd because we don't have one of Annette Repasch

In her new role, Repasch will oversee merchandising strategy and product development for the categories of Jewelry & Watches, Health &Beauty, and Fashion & Accessories.

Repasch at one point in her career did a seven-year gig at QVC. She is joining ShopNBC from Stages Stores, where she served as senior vice president and general merchandise manager (GMM), overseeing $800 million in ladies apparel sales.

Previously, she was vice president and GMM of apparel & accessories at QVC, where she oversaw a $1.3 billion apparel & accessories business, achieving double-digit improvements in sales and profitability each year.

Repasch has also held senior merchandising roles in both specialty and department stores (Saks, Lane Bryant and Bon-Ton).

Here’s the spin on her from ShopNBC:

Ms. Repasch has extensive experience in driving growth in apparel, footwear, cosmetics and accessories businesses. She is also accomplished in brand building with a strong customer focus and proven track record in developing and marketing profitable product lines.

Ms. Repasch has core competencies in product development, new business development, organizational and P&L operations management, forecasting and reporting, and merchandise production planning.

“Annette is an outstanding merchandising executive with extensive experience and a proven track record of delivering results both strategically and creatively,” Ayd said in a canned statement. “She has tremendous passion for our industry and for the customer. I’ve had the pleasure of working with her in the past, and now look forward to her contributions in driving the business and as a valued addition to our leadership team.”

And here is Repasch’s canned statement, which reminds us of “The Godfather”:

“The opportunity to return to multichannel retail and join the impressive team at ValueVision was just an offer I could not refuse, particularly given the game-changing potential of Internet and mobile shopping,” she said. “ShopNBC has executed a remarkable operational and financial turnaround the past two years. I couldn’t be more excited to join Bob, Keith and the whole team as they turn their full focus to merchandising strategies to drive long-term growth across their TV, Internet and mobile platforms.”

Does anyone really say “multichannel retail”?