QVC, HSN Parent Names Successor To Mike George

We won’t have Mike George to kick around for very long soon.

Qurate Retail, owner of QVC and HSN, on Tuesday announced that David Rawlinson II will assume the role of president and CEO effective Oct. 1. He will succeed George after a two-month transition period, beginning Aug. 1, during which time Rawlinson will serve as president and CEO-elect.

Prior to joining NielsenIQ as CEO, Rawlinson was president of Grainger Global Online, where he led the fastest growth, stand-alone division of W.W. Grainger Inc. , a Fortune 500 firm. Under his leadership “the business grew double digits every year and won multiple national awards for workplace culture,” Qurate said in its press release.

Rawlinson has also held executive roles with ITT Exelis, formerly ITT Corp. He also served a Presidential appointment as a White House Fellow and held various appointed positions in both the Bush and Obama administrations.

In the Obama Administration, he was a senior adviser for economic policy with the White House National Economic Council. He has an MBA from Harvard Business School, a JD from the University of South Carolina School of Law and is a graduate of The Citadel, a tough-ass military school.

Impressive.

From Oct. 1 until his retirement at year-end, George will serve as a senior adviser to Qurate to assist in transitional matters. Effective Jan. 1 next year, and concurrently with George’s retirement from Qurate’s board, Rawlinson will join the board. Qurate had announced in November 2020 that George would be retiring from the company at the end of this year.

“We are pleased to welcome David Rawlinson to the Qurate family. David brings an impressive track record of success, most recently with two storied brands, Nielsen and Grainger,” Greg Maffei, Qurate Executive Chairman, said in a statement.

“At these companies, David was a transformational leader and successfully managed the businesses through evolutionary transitions,” Maffei said. “His knowledge of global e-commerce, understanding of consumer trends and focus on mission and culture as a purpose-driven leader make him a natural fit for Qurate Retail.”

And here are Rawlinson’s words of wisdom.

“Qurate Retail operates as a unique and powerful enterprise. The world of shopping has been forever changed by the pandemic and these brands have the international scale, customer affinity, and expertise in driving and meeting demand across multiple platforms to define the future of experiential retail.”

“QVC and HSN pioneered home shopping and are now set to define a new world of seamless shopping. Zulily, Ballard Designs, Frontgate, Garnet Hill and Grandin Road are all focused and modern brands with passionate customers and unique value propositions. Together, Qurate Retail is in a strong position to drive value for our customers, shareholders, communities, and employees. I look forward to working with the exceptional team at Qurate Retail and I am grateful to Mike for being such a capable and values-driven leader for the company.”

QVC’s Second-Quarter Sales Dip 4 Percent

Like HSN, which it will soon own, QVC had a tough second quarter.

QVC’s parent, Liberty Interactive Corp., this week reported that the No. 1 home shopping network saw its second-quarter revenue drop 4 percent, to $1.37 billion, year over year.

QVC “experienced year-over-year revenue declines in all categories except home,” Liberty reported. As for the 4 percent drop, it was “inclusive of an estimated 1 percent negative impact from system outage in second quarter that resulted in shipment backlog into third quarter.” That was news to us.

QVC’s operating income, a key measure, dipped 5 percent, to $225 million.

“Operating income margin and adjusted OIBDA margin performance primarily reflect lower bad debt, higher product margins and higher credit card income, partially offset by higher bonus expense, warehouse costs and depreciation,” according to Liberty.

Similarly, HSN recently suffered a 4 percent drop in its second-quarter sales, to $532.2 million.

The numbers we just provided are for domestic QVC alone, not for the stable of home shopping channels that it has across the globe.

“QVC had a solid Q2, with revenue performance similar to Q1 and improved adjusted OIBDA margins,” Liberty Interactive President and CEO Greg Maffei said in a canned statement. “We were thrilled to announce the acquisition of HSNi, which will enhance QVC’s position as the leading global video eCommerce retailer.”

QVC honcho Mike George crowed about the performance of the international networks, but not the U.S. one.

“We were pleased to generate strong margin expansion in the second quarter due to our focus on cost controls and avoidance of excessive promotional activity,” George said in his canned statement.

“We are executing on a number of strategies that we expect to restore healthy growth, with a particular focus on greater diversity and newness in our assortments. We were delighted with the strong performance of our International segment, which was led by QVC Japan. We look forward to welcoming the HSNi team to the QVC family with the completion of the acquisition in the fourth quarter, which we believe will be accretive to all of our stakeholders.”

QVC’s 4Q Revenue Drops 7 Percent, To $1.9 Billion

The end of last year was tough going for home shopping networks.

On Tuesday QVC’s parent released fourth-quarter earnings, and the channel saw a dip in its sales, just like its rival HSN recently reported.

QVC’s U.S. revenue dropped 7 percent, to $1.9 billion in the fourth quarter and 2 percent, to $6.1 billion, in 2016, according to Liberty Interactive Corp.

“Internationally, QVC continues to perform well, while domestically we are focusing on strengthening a few merchandise categories that have been weak,” Liberty Interactive President and CEO Greg Maffei said in a canned statement.

HSN just had similar bad news to report. Its net sales dipped 1 percent, to $769.3 million, in the fourth quarter versus the prior year. In 2016, HSN’s sales were down 3 percent, to $2.5 billion.

QVC’s top honcho Mike George had a lot of ‘splaining to do. And he did.

“Our international segment generated strong results in the quarter with broad-based sales gains and margin expansion,” George said. “The sales trend in our U.S. business persisted from the third quarter primarily due to continued headwinds in select categories. We have strong action plans in place and are confident in our ability to return the US business to growth.”

“In 2016, we continued to significantly advance our digital platforms. eCommerce and mobile penetration grew approximately 260 and 800 basis points, respectively,” he said. “As we begin 2017, we are serving a large, engaged customer base, and we are creating competitive advantages as we further extend our reach across digital and next generation commerce platforms. We will leverage these strengths to build on our highly differentiated shopping experience.”

In the quarter, QVC’s average selling price per unit (“ASP”) decreased 8 percent to $56.78, units sold increased 1 percent, and returns as a percentage of gross product revenue improved 32 basis points. The U.S. experienced year-over-year declines in all categories except apparel.

For the year, ASP decreased 6 percent to $57, units sold increased 2 percent, and returns as a percentage of gross product revenue improved 104 basis points. Domestic QVC experienced year-over-year declines in jewelry, electronics and beauty, which were partially offset by gains in apparel, home and accessories.

E-commerce revenue decreased 1 percent to $1.1 billion and grew 326 basis points to 56 percent of total U.S. revenue in the quarter. For the year, e-commerce revenue increased 4 percent to $3.2 billion and rose 328 basis points to 52 percent of total U.S. revenue.

In the quarter, operating income decreased 15 percent to $303 million, operating income margin declined 143 basis points, adjusted OIBDA decreased 9 percent to $438 million and adjusted OIBDA margin declined 43 basis points, including the aforementioned cost allocations.

Excluding the cost allocations, adjusted OIBDA decreased 10 percent to $431 million and adjusted OIBDA margin declined about 80 basis points, primarily due to higher freight and warehouse expenses and lack of sales leverage.

For the year, operating income decreased 6 percent to $915 million, operating income margin declined 58 basis points, adjusted OIBDA decreased 2 percent to $1.4 billion and adjusted OIBDA margin was flat, including the aforementioned cost allocations.

Excluding the cost allocations, adjusted OIBDA decreased 4 percent to $1.4 billion and adjusted OIBDA margin decreased roughly 50 basis points, primarily due to lower product margins and higher bad debt, freight and warehouse expenses, which were partially offset by lower personnel expenses and favorable inventory obsolescence.

Beginning in the first quarter of 2016, QVC began allocating certain corporate costs for management reporting purposes differently, Liberty Interactive said in its press release.

Historically, QVC allocated these costs to the market from which the services were provided. As more of QVC’s costs support initiatives in multiple markets, QVC is allocating costs to the markets that will benefit from the expenditures. These management cost allocations are related to certain functions, such as merchandising, commerce platforms, information technology, human resources, legal, finance, brand and communications, corporate development and administration.

The cost allocations (from QVC U.S. to QVC International) totaled about $7 million in the fourth quarter and $31 million for 2016. As a result of the allocations, the U.S. segment’s operating income and adjusted OIBDA margins were each positively impacted approximately 35 basis points in the quarter and 50 basis points for the full year.

QVC’s Parent To Release Third-Quarter Results Nov. 8

QVC’s parent company, Liberty Interactive Corp., will report third-quarter earnings Nov. 8, John Malone’s empire announced Friday.

Liberty President and CEO Greg Maffei will host a conference call to discuss results at noon that day.

Following prepared remarks, the company will host a brief Q&A session during which management will accept questions regarding both Liberty Interactive and Liberty TripAdvisor Holdings. This is when QVC honcho Mike George usually chimes in.

During the call, Maffei may discuss the financial performance and outlook of both companies, as well as other forward looking matters including the proposed split-off of Liberty Expedia Holdings Inc.

To those interested, call ReadyTalk at (844) 307-2219 or (678) 509-7635 at least 10 minutes prior to the call. Callers will need to be on a touch-tone telephone to ask questions. The conference administrator will provide instructions on how to use the polling feature.

In addition, the third-quarter conference call will be broadcast live online.

All interested participants should visit the Liberty Interactive website at http://www.libertyinteractive.com/events to register for the webcast. Links to the press release and replays of the call will also be available on the Liberty Interactive Corporation website.

The conference call and related materials will be archived on the website for one year after appropriate filings have been made with the Securities and Exchange Commission.

Which QVC Brand Tanked In 2Q? Mean Maffei

The transcript of QVC’s parent, Liberty Interactive Corp., second-quarter call with Wall Street analysts wasn’t as juicy or illuminating as HSN’s.

But we pulled a few quotes from QVC CEO Mike George from it. They come from a transcript provided by Seeking Alpha.

Maddeningly, George talks about a big drop-off in one of QVC’s brands, but does not identify which one it was as far as we can tell.

Our favorite line from George was, “Let’s not make such knee-jerk decisions that we start to really pollute the business.”

And by the way, QVC will be offering Easy-Pay less often.

http://seekingalpha.com/article/3996597-liberty-interactives-qvca-ceo-greg-maffei-q2-2016-results-earnings-call-transcript?auth_param=1cprs8:1bqa0jd:f0a01469fbb18e68747393411c7da499&uprof=53&dr=1

“We experienced strong growth in fashion, particularly in our proprietary brands such as LOGO, Isaac Mizrahi, Susan Graver and Denim & Company. Our household and garden categories also performed strongly with impressive results from home security and fitness.”

“In home decor, we saw strong performance from Northern Nights bedding and Select Comfort and Serta mattresses. These gains were partially offset by continued under performance in jewelry and consumer electronics and softening results in kitchen cook.”

“In jewelry, we were pleased with the launch of Stella & Dot and we began to build the My Saint My Hero brand with the very successful June TSV. And while sales results for the quarter were solid, our trajectory weakened late in the quarter.”

“And while harder to quantify, it appears that all of the distractions this summer from world events and the U.S. election season are also having some impact and we anticipate additional sales pressure from the Olympics starting today.”

“Finally, one of our largest brands faced a significant drop-off in sales at QVC and other outlets, which did materially impact our overall results. Now this particular issue is brand specific and not reflective of our overall consumer health.”

“While Easy-Pay remains a key component of our model, we are proceeding with this more measured approach until we see healthier customer behavior.”

“For Q3, we are excited about the launch of Belle by Kim Gravel, Hot in Hollywood denim, Naot footwear and Mario Buccellati in jewelry, among many others.”

We noticed that Liberty Interactive Greg Maffei got a little testy with Tom Forte, an analyst with Maxim, when he tried to ask more than one question.

“No. You get to ask two questions, that’s it,” Maffei scolded.

Really Greg?

Forte must have written a negative report on Liberty somewhere along the line.

QVC’s Parent To Post First-Quarter Results May 9

Liberty Interactive Corp., QVC’s parent company, will release its first-quarter results May 9.

Liberty President and CEO Greg Maffei will host a conference call to discuss the earnings at 12:15 p.m. (E.D.T.).

Following prepared remarks, the company will host a brief Q&A session during which management will accept questions regarding both Liberty Interactive and Liberty TripAdvisor Holdings. During the call, Maffei may discuss the financial performance and outlook of both companies, as well as other forward looking matters.

You can call ReadyTalk at (844) 307-2219 or (678) 509-7635 at least 10 minutes prior to the call.

In addition, the first-quarter earnings conference call will be broadcast live via the Internet. Interested participants should visit the Liberty Interactive website at http://www.libertyinteractive.com/events to register for the webcast.

Links to the press release and replays of the call will also be available on the Liberty Interactive site. The conference call and related materials will be archived on the website for one year.

QVC Reports Fourth-Quarter Results Feb. 26

QVC’s parent, Liberty Interactive Corp., will release its fourth-quarter earnings Feb. 26, the home shopping network said Tuesday.

Liberty President and CEO Greg Maffei will host a conference call to discuss results for the quarter at 12:15 p.m.

Following prepared remarks, the company will host a brief Q&A session during which management will accept questions regarding both Liberty Interactive and Liberty TripAdvisor Holdings.

During the call, Maffei may discuss the financial performance and outlook of both companies, as well as other forward-looking matters.

The fourth-quarter earnings conference call will be broadcast live via the Internet. All interested participants should visit the Liberty Interactive Corporation website at http://www.libertyinteractive.com/events to register for the web cast.

Links to the press release and replays of the call will also be available on the Liberty Interactive website. The conference call and related materials will be archived on the website for one year.

QVC Sees 4 Percent Gain, To $1.4 Billion, In Third-Quarter Sales

Following on the heels of HSN’s report, QVC announced Wednesday that its revenue increased 4 percent to $1.4 billion in the third quarter versus last year.

Earlier in the day, HSN said that its net sales in the quarter rose 2 percent, to $590.6 million, which was below Wall Street’s projections.

At the No. 1 domestic home shopping network, part of Liberty Interactive Corp., units sold rose 5 percent; average selling price per unit increased 1 percent to $58.70; and returns as a percentage of gross product revenue increased 21 basis points.

QVC U.S. experienced growth in the apparel, accessories, home and beauty categories, which was partially offset by a decline primarily in jewelry.

Ecommerce revenue increased 15 percent to $678 million and was up 48 percent from 43 percent of total QVC revenue.

Adjusted OIBDA increased 1 percent to $333 million and adjusted OIBDA margin decreased 55 basis points to 23.5 percent. These results were primarily due to higher freight and inventory obsolescence expense, which were partially offset by higher product margins and lower bad debt expenses.

“QVC generated strong results across the board with local currency growth in all consolidated markets for the second quarter in a row,” Liberty Interactive President and CEO Greg Maffei.

“The expansion in mobile orders continues at a rapid pace, comprising 53 percent of consolidated ecommerce orders,” he said. “We completed the acquisition of Zulily and have already begun introducing its customers to QVC.”

The entire QVC group, which includes Liberty Interactive’s many international home shopping networks, saw its consolidated revenue drop 1 percent, to $2 billion.

“U.S. dollar denominated results were negatively impacted by exchange rate fluctuations in the third quarter,” QVC said in its press release.

The Dollar strengthened against the Euro, Japanese yen and British pound sterling 16 percent, 15 percent and 7 percent, respectively.

On a constant currency basis, consolidated revenue increased 4 percent and adjusted OIBDA increased 1 percent compared to a 1 percent and 2 percent decline in dollars, respectively.

Excluding the costs related to launch QVC France, consolidated adjusted OIBDA increased 3 percent on a constant-currency basis in the quarter.

“We delivered strong constant currency revenue gains across markets as we continued to execute our strategies to extend our leading global video and eCommerce position,” QVC President and CEO Mike George said.

“We expanded our commerce platform reach with additional TV carriage and increased digital penetration, and mobile orders now represent over 50% of all eCommerce orders,” he said.

“We enhanced our merchandise differentiation with key brand launches and leverage of our global vendor network. Our joint venture in China generated outstanding results, and on October 1st we welcomed Zulily to the QVC Group, extending our reach to millennial customers.”

QVC’s Parent Puts $2.4 Billion In Charter-Time Warner Cable Deal

We used to cover the cable TV industry, and one thing we learned was that John Malone, the so-called cable cowboy and pioneer, usually found a way to get what he wanted. And he wanted Time Warner Cable.

Malone, via Charter, in 2014 failed in his first bid to acquire Time Warner, and the news accounts at that time crowed that Brian Roberts, the head of media powerhouse Comcast Corp., had swooped in and outmaneuvered Malone.

John Malone

But when federal regulators indicated they would not approve Comcast’s proposed purchase of Time Warner, Malone had the last laugh, using his cable company Charter to buy it.

http://www.bloomberg.com/news/articles/2015-05-25/charter-said-to-near-deal-for-time-warner-cable-at-195-a-share

What does this all have to do with home shopping?

On Tuesday QVC’s parent and a company chaired by Malone, Liberty Interactive Corp., announced that it was going to invest $2.4 billion in Liberty Broadband “in connection with (and contingent upon) the closing of today’s announced proposed merger of Charter Communications Inc. and Time Warner Cable Inc.”

The press release said that proceeds of the investment will be used by Liberty Broadband to fund, in part, its agreement to acquire $4.3 billion of Charter stock.

Liberty Interactive’s investment in Liberty Broadband will be funded using cash on hand and will be attributed to the Liberty Ventures Group.

“We are excited for Liberty Interactive to make this attractive investment in Liberty Broadband, providing our shareholders with the unique opportunity to realize value from the proposed consolidation in the cable industry announced today by Charter,” Liberty President and CEO Greg Maffei said in a canned statement. “Through this transaction, Liberty Interactive has the ability to deploy a significant amount of capital and become a meaningful shareholder of Liberty Broadband.”

Liberty Interactive operates and owns interests in a broad range of digital commerce businesses currently attributed to two tracking stock groups: the QVC Group and the Liberty Ventures Group.

The businesses and assets included in the QVC Group are of QVC Inc., and its interest in HSN Inc.

The assets attributed to the Liberty Ventures Group include its interest in Expedia, Interval Leisure Group, Lending Tree and FTD, its subsidiaries Backcountry.com, Bodybuilding.com, CommerceHub, LMC Right Start and Evite, and minority interests in Time Warner and Time Warner Cable.

Maffei To Head QVC’s Parent Liberty Through 2019

At last, some news after the holidays.

Greg Maffei will continue as President and CEO of Liberty Interactive Corp., parent of QVC, and Liberty Media Corp. through 2019, the companies said Monday.

Their boards approved new employment arrangements with Maffei.

“We are extremely pleased that Greg will continue in his leadership role for another five years,” Cable cowboy John Malone, chairman of Liberty Interactive and Liberty Media, said in a canned statement. “His creativity and strategic vision have been transformational and have created tremendous shareholder value since he joined us in 2005.”

Maffei, usually a man of few words, had his own quote, although he didn’t say much, other than brown-nosing his bosses.

“I am thrilled to continue in my role at Liberty,” Maffei said. “I want to thank John and the board members for the support I have received as we have made significant investments and transformative changes. Today, Liberty has a portfolio of businesses that are very well-positioned for the digital mobile era, led by great management teams, with the resources to be opportunistic in the future.”

Under the Maffei’s new deal, he will get an annual base salary of $960,750, increasing annually by 5 percent of the prior year’s base salary, and an annual target cash bonus equal to 250 percent of the applicable year’s base salary.

He also has the opportunity to earn annual performance-based equity incentive awards during the employment term. And they are sweet.

http://ir.libertyinteractive.com/secfiling.cfm?filingid=1104659-14-89108&CIK=1355096

Liberty Interactive operates and owns interests in a broad range of digital commerce businesses attributed to two tracking stock groups: the QVC Group and the Liberty Ventures Group.

The businesses and assets attributed to the QVC Group (Nasdaq: QVCA, QVCB) consist of Liberty Interactive’s subsidiary, QVC Inc., and its interest in HSN, Inc., and the businesses and assets attributed to the Liberty Ventures Group (Nasdaq: LVNTA, LVNTB) consist of all of Liberty Interactive Corporation’s businesses and assets other than those attributed to the QVC Group, including its interest in Expedia, its subsidiaries Provide Commerce, Backcountry.com, Bodybuilding.com, CommerceHub, LMC Right Start and Evite, and minority interests in Time Warner, Time Warner Cable, Lending Tree and Interval Leisure Group.