Archive for the ‘QVC Japan’ Category

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

May 6, 2011

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.

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QVC Puts Its Japanese Network Back On The Air, Pledges $1.3 Million In Disaster Relief

March 24, 2011

We’ve been so busy at our day job, we’ve barely had time to breathe, let alone blog. But we saw some good news tonight when we were checking QVC.com.

There was a press release that said QVC Japan resumed broadcasting on a 24-hour live basis Wednesday at 10 a.m., local time.

In addition, QVC has pledged $1.3 million to support disaster relief, and has mobilized its operations globally to facilitate customer and employee donations.

“I would like to express our deepest sympathy to those people involved in the disaster,” QVC Japan CEO Chris Horobin said in a canned statement. “Having witnessed so many people’s energy, passion and bravery in response to the tragedy, I am confident that Japan will recover soon.”

Globally, QVC has now pledged a total of $1.3 million, including a $100,000 donation already made to the American Red Cross in the hours following the disaster March 11.

QVC Japan is exploring nonprofit organizations to receive these contributions to support the disaster relief efforts, according to the press release.

In addition, the first hour of QVC Japan programming was devoted to disaster relief, with certain proceeds generated from its sales made between 10 a.m. and 11 a.m., local time, pledged to the Japanese Red Cross. This contribution is in addition to the $1.3 million company pledge.

QVC is also encouraging employees and customers to support the Red Cross. QVC in the United States, United Kingdom, Germany and Italy has promoted Red Cross donation efforts on air, via company websites, and through social media outreach.

“Our hearts go out to the millions of people who were impacted by the major earthquake and tsunami that struck Japan,” QVC president and CEO Mike George said in his statement. “As a global company, we are committed to supporting the disaster relief efforts.”

QVC Japan has headquarter offices, studios and a customer-contact center in Makuhari, Chiba and a distribution center in Sakura, Chiba.