Posts Tagged ‘Mike George’

Combined QVC-HSN Sales Slip 1%, to $1.87 Billion, in Second Quarter

August 9, 2019

This is an interesting turn of events: Qurate Retail is no longer breaking out separate financial figures, such as sales, for QVC and HSN. And the nets have a new honcho.

Qurate, parent of the two top home shopping networks, reported its second-quarter earnings Thursday. And it only broke out info for QxH, its goofy name for the umbrella company that runs and oversees the two channels. So we don’t know, at least from the 2Q press release, how QVC did versus HSN, just the combined data for QxH.

So QxH saw its revenue dip 1%, from $1.9 billion to $1.874 billion, in the second quarter compared with the year-ago quarter.

QxH reported sales declines in apparel and jewelry, which were partially offset by gains primarily in accessories and electronics, according to Qurate’s press release.

Operating income margin contracted and adjusted OIBDA margin was flat, reflecting gross margin pressure mainly from higher fulfillment (freight and warehouse) expense, which was partially offset by higher product margins, if you can make any sense of that.

QxH also incurred higher bad debt and marketing expense, according to its parent. These factors were offset by lower TV distribution commissions and customer service expense.

Lower TV distribution commissions were due in part to the accounting treatment for certain renewed HSN carriage agreements, as well as renegotiated rates at HSN and growth in off-air sales. Operating income included higher amortization expense related to HSN carriage agreements.

Beginning in the third quarter last year, HSN began renewing TV carriage agreements with several distributors — meaning cable and satellite companies — which provided multiyear upfront payments that are amortized over the life of the agreements, versus its previous convention of expensing quarterly payments as incurred. This accounting change has a positive impact on QxH’s adjusted OIBDA with a corresponding increase in QxH’s amortization expense, which is neutral to operating income each period and cash neutral over the life of the agreements.

That’s too much accounting mumbo-jumbo for us, but maybe you can make sense of it.

And here’s the exciting statement from Qurate President and CEO Mike George.

“We made good strategic and operational progress, evidenced by the sequential improvement in revenue and adjusted OIBDA margin at QxH and the double-digit, year-over-year adjusted OIBDA growth at QVC International in constant currency,” George said.

“These gains were partially offset by deterioration at Zulily. We are encouraged by the resiliency of our businesses and our ability to generate high levels of adjusted OIBDA and free cash flow in a dynamic and highly competitive environment. We resumed share buybacks, repurchasing nearly 12 million shares at an average price per share of $12.88 following our last earnings call. Going forward, we remain focused on building on the collective strengths of QVC and HSN, realizing synergies and stabilizing Zulily.”

Qurate also said that it had appointed Leslie Ferraro, a former Walt Disney Co. executive, as president, QxH, effective Sept. 16.

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Combined QVC-HSN 1Q Sales Drop 4%, to $1.9 Billion

May 9, 2019

QVC’s and HSN’s combined revenue slid 4% in the first quarter versus last year, to $1.9 billion, in a performance that even Mike George couldn’t put a good spin on.

The two domestic home shopping networks, merged in a unit named QxH by their parent Qurate Retail Inc., for the first time reported their sales as one entity.

“Our first quarter performance was disappointing amidst a changing retail and media landscape,” George, president and CEO of Qurate Retail, said in a canned statement.

“Our recent results have been more variable as we navigate the evolution of our business model and the integration of HSN, fine-tune our investments, and strike the right balance between sensible revenue growth, margin expansion, new customer acquisition and our strategic initiatives,” he said.

“We are taking a disciplined approach, investing in initiatives to drive high-quality customer growth and engagement, broaden and deliver our assortments, particularly across new digital platforms, and optimize our fulfillment network. Our customer fundamentals remain strong, including customer count, retention and purchase frequency. We are confident we are taking the right actions to deliver attractive operating margins and free cash flow for the long-term.”

So what happened?

QxH experienced sales declines in home, jewelry and beauty, which were partially offset by gains in electronics with modest growth in fashion (apparel and accessories), according to the first-quarter press release.

QxH enjoyed strong sales growth in off-air products; however, these gains were not sufficient to offset lower sales of on-air items.

“Operating income and adjusted OIBDA margin) contraction was primarily due to higher inventory management costs, fulfillment and marketing expenses, which were partially offset by lower TV distribution commissions and higher product margins,” the press release said. “Lower TV distribution commissions at QxH are in part due to the accounting treatment for certain renewed HSN carriage agreements (described below). Operating income also included higher amortization expense related to the amortization of HSN carriage agreements.”

Starting in the third quarter last year, HSN began renewing TV carriage agreements with several distribution partners, which provided multiyear upfront payments that are amortized over the life of the agreements, versus its previous convention of expensing quarterly payments as incurred, according to the press release.

This accounting change has a positive impact on QxH’s adjusted OIBDA with a corresponding increase in QxH’s amortization expense, which is neutral to operating income each period and cash neutral over the life of the agreements.
Roger that, if you have an accounting degree.

If you want to hear the juicy details, Qurate Retai President and CEO Mike George and Executive Chairman Greg Maffei, will discuss the earnings on a conference call which will begin at 8:30 a.m. (E.D.T.) on this Friday, May 10. The call can be accessed by dialing (800) 458-4121 or (323) 794-2093, passcode 3078914, at least 10 minutes prior to the start time. The call will also be broadcast live across the Internet and archived on our website.

To access the webcast go to http://ir.qurateretail.com/events-and-presentations. Links to this press release and replays of the call will also be available on Qurate Retail’s website.

QVC Posts 3 Percent 2018 Sales Growth, HSN Down 6 Percent

February 28, 2019

QVC was up last year, and HSN was down.

That was the news Wednesday when the parent of the two home shopping networks, once rivals but now under the same ownership, reported fourth-quarter earnings.

Domestic QVC’s revenue rose 3 percent in both Q4, to $2.087 billion, and all of 2018, to $6.349 billion, according to Qurate Retail.

In comparison, No. 2 home shopping channel HSN’s revenue dropped 1 percent in Q4, to $707 million, and declined 6 percent last year, to $2.202 billion.

“In 2018, we made meaningful progress shaping the future of Qurate Retail, highlighted by the strongest new customer growth at QVC US in its 33-year history and continued gains in digital and mobile engagement,” Mike George, Qurate’s president and CEO, said in a statement.

“Results for the year were led by top-line growth at QVC US and International, excellent performance from zulily, and significantly improved second-half results at HSN as we execute on its turnaround,” George said. “Margin improvement is a top priority in 2019, as we step up the realization of integration synergies and seek to execute on initiatives to improve product margin and optimize our marketing investments.”

In the fourth quarter, QVC saw sales gains primarily in electronics, apparel and accessories, which were partially offset by declines mainly in home.

For the full year, QVC posted revenue increases mainly in accessories and apparel, which were partially offset by declines principally in jewelry.

In Q4, HSN suffered sales declines in electronics and jewelry, which were partially offset by gains primarily in accessories, beauty and apparel.

For the full year, HSN realized declines in all categories. Not good.

Here’s another inside tidbit: HSN is operating under several renewed carriage agreements with certain distribution partners beginning in the third quarter of 2018 which provide for capitalized upfront payments that are amortized over the life of the agreements, versus HSN’s previous convention of expensing the payment associated with the contract terms each quarter.

QVC, HSN Tout Digital Initiatives — and Baby, Outdoor and Tabletop

November 20, 2018

Well Qurate Retail Inc., parent of QVC and HSN, apparently had a lollapalooza of an Investor’s Day last week in the Big Apple.

The webcast of the dog-and-pony show for Wall Street runs more than six hours. You can hop on Qurate’s website if you want to listen.

http://ir.qurateretail.com/events.cfm.

We’re dedicated, but not that dedicated. But Qurate put out a press release Monday summarizing some of the takeaways that honcho Mike George shared.

http://ir.qurateretail.com/news-releases/news-release-details/qurate-retail-announces-new-digital-investments-and-cost

It’s digital, digital and more digital, according to George. The home shopping channels are venturing onto new turf — baby, outdoor and tabletop. And George has five biggies on his “To-Do” list.

• Be the destination for product discovery.
• Inspire shopping journeys spanning all media platforms customers use.
• Make digital marketing a powerhouse demand driver.
• Extend the conversation through the power of social media.
• Enhance the service experience.

“The soul of the shopper, over time and across generations, hasn’t really changed,” George said in the press release. “Shopping is still about discovering great products, at great values, with great stories. It’s joyful, inspiring and built on trust. It lifts people up, helps them solve old problems in new ways, makes their lives easier, and connects them to the wider world. This is what we do, and this is why we have so many opportunities to evolve and grow in today’s rapidly changing retail and media landscape.”

We’re going to post the press release directly, from the horse’s mouth, so to speak, on the  priorities:

Be the destination for product discovery

“Our business model starts with being great product curators,” George said. “We’re committed to bringing our customers more discoveries, increasing product differentiation, driving strong values, and engaging customers of all generations.”

Qurate Retail is investing in an expanded digital store, adding 180 new digital-only brands across HSN and QVC over the past few months and entering new categories, such as baby, outdoor and tabletop. Year-to-date, the company has hired over 25 people to help drive this effort. In addition, more brands with strong cross-generational appeal are launching first on digital.

Qurate Retail also is launching Qurate D3 (for Discovery, Design, and Development), an expanded function to find or develop exclusive product lines around the world.
Inspire shopping journeys spanning all media platforms customers use.

“The explosion of digital media creates enormous opportunities for us to access, engage, and inspire consumers of all generations, over her video platforms of choice, with the right content, at the right time,” George said. “We have a strong advantage over other retailers or content programmers: We own all of our content, our incremental cost to create content is low, and we already have significant experience distributing content across emerging and other digital platforms.”

Qurate Retail continues to expand viewership across media platforms. In the U.S., TV viewership for QVC and QVC2 rose 5% year-to-date. HSN and QVC continue to increase their presence on traditional TV platforms. In addition, the brands are assessing how to optimize the positioning, programming, and scheduling of the five U.S. networks (QVC, QVC2, HSN, HSN2 and Beauty iQ) to appeal to the broadest range of consumers and provide maximum choice.

Viewership on new media platforms is also growing. From Q3 2017 to Q3 2018, minutes viewed via QVC US OTT platforms (Amazon, Apple, Roku), Facebook Live5 pages and digital platforms rose by more than 75%, while minutes viewed via the QVC US YouTube page doubled.

Early next year, Qurate Retail will build on its mobile leadership by launching a new Watch App, designed to be the daily discovery destination for today’s mobile consumer, with easy access to live shows, product videos and episodic content. By liking videos, users will be able to create their own playlists, and a click on a video will bring up product details and the ability to purchase.

In addition:

• The next generation of HSN’s proprietary Shop by Remote app is rolling out, and QVC began deploying the app earlier this month as well.
• QVC is expanding its OTT apps, including the October 2018 launch on Amazon Fire and the June 2018 launch of a new OTT service in Germany.

Make digital marketing a powerhouse demand driver

“We are rapidly scaling our digital marketing to generate demand, showcasing our best items, complementing the power of our TV distribution, and driving new generations of customers to our new media platforms,” George said.

Qurate Retail is building an in-house marketing agency to support QVC and HSN, drawing top talent from digital marketing leaders. The team is leveraging machine learning tools from zulily to create and deploy advertising intraday to maximum effect.

Digitally-driven sales are growing, driven in part by digital marketing. Year-to-date, sales for items that are promoted only via QVC’s digital platforms rose 11%, and sales for items that had not been featured on-air in the prior 24 hours rose 7%.

Extend the conversation through the power of social media

“Social platforms enable us to reach and engage new consumers, while also deepening the engagement of our best customers by fostering powerful viral communities,” George said.

Qurate Retail has built a network of influencers who can amplify HSN or QVC products and platforms with their followers. In addition, Qurate Retail has launched three social marketplaces – Ellie Sugar and Fuss Beauty in the U.S. and TILI (Try It Love It) in the U.K. – designed to reach beauty shoppers who may not be aware of the curated products and engaging experiences offered by HSN and QVC. The company also has launched its first skill on the Alexa platform, enabling users to watch or listen to HSN live and obtain information about HSN’s broadcast and products. By early 2019, users will be able to order products and check shipping updates and other account details, all via voice.

Enhance the service experience

<em>”We recently announced a multiyear plan to reduce delivery times by two days and increase package consolidation by integrating our HSN and QVC US fulfillment networks,” George said. “This is just one example of how we are investing to ensure that our service promise stays among the best.”

The plan to integrate the fulfillment networks was announced in October. The first phase includes opening a new fulfillment center in Bethlehem, PA in 2019, as well as anticipated closures of fulfillment centers in Lancaster, PA, Roanoke, VA, and Greeneville, TN in 2020.

Additionally, Qurate Retail will evolve toward a leased vs. owned model for many of its fulfillment facilities to increase flexibility and reduce longer term capital requirements.
Qurate Retail’s multiplatform approach is helping the company expand its customer base.

Over the past 12 months3, new customer counts for QVC US rose 4%, with 83% of new customers coming through digital platforms. QVC US also saw a meaningful shift among new customers to customers who are 18-44 years old. Overall, the QVC US customer base is up 2% year-to-date, with strong and stable customer retention.

Third Quarter: QVC Sales Up a Smidgen, HSN Down

November 12, 2018

Last week Qurate Retail, the parent of QVC and HSN, reported its third-quarter results. They are a bit complicated, because of an accounting change in the way Qurate accounts for revenue.

Here’s as best as we understand it: Qurate has adopting a new accounting standard, so QVC and HSN are now recognizing credit-card income for their branded credit cards as part of their net revenue “rather than as an offset to selling, general and administrative expense.”

That change will positively impact Qurate Retail’s revenue for 2018.

Here’s the deal: QVC’s revenue in the third quarter as up 3 percent — to $1.42 billion — when you include the $26 million in credit-card revenue. But it only rose 1 percent without it.

In HSN’s case, its revenue was down 4 percent — to $514 million — including its $3 million from credit-card revenue. But revenue dropped a whopping 5 percent without that added addition of funds.

Before we provide the official third-quarter details, we can also report back on what Qurate head honcho Mike George had to say on the third-quarter conference call with Wall Street analysts.

For those who were shocked to see QVC standards like Dooney & Bourke and Judith Ripka on HSN, expect more of such QVC-HSN crossovers, George said.

But so-called proprietary brands, like QVC’s Isaac Mizrahi, will not be making their way to HSN, according to George.

He also said that 100 new products are heading to HSN, and that the home shopping network will be getting its own new proprietary lines developed by the merged QVC-HSN department that will work on such projects for both channels. Previously at HSN, Joy Mangano’s company was devising a lot of that home shopping network’s own brands, like Iman.

And as reporters, we sympathized with the Wall Street analysts who asked a lot of questions but didn’t get many answers from George. For example, HSN apparently just did a new carriage deal with a distributor. Under questioning, George wouldn’t identify who that cable or satellite provider was.

Yet even as he ducked answering their queries, these analysts kind of groveled and thanked him for his non-answers.

As for the results that Qurate would talk about, in the third quarter QVC saw sales gains in accessories, beauty and electronics, which were partially offset by declines in home and jewelry.

“As noted last year, QVC US experienced a systems outage late in the second quarter of 2017, which resulted in an estimated 1 percent shift in net revenue to the third quarter of 2017,” Qurate said in its press release. “This outage negatively impacted revenue by approximately 1 percent in the third quarter of 2018 due to the comparability of results.”

Over at HSN, which will see its ranks decimated by layoffs that QVC announced last month, in the third quarter its “sales mix shifted to home, accessories and beauty from apparel, jewelry and electronics and resulted in an improved return rate,” according to Qurate.

HSN also paid $12 million in severance costs in the quarter.

“In the third quarter of 2017, HSN’s results were impacted by Hurricane Irma,” Qurate said. “At that time, HSN estimated that revenue was negatively impacted by approximately $13 million and adjusted OIBDA was negatively impacted by approximately $5 million.”

And here’s the big deal that George was so secretive about.

“Beginning in the third quarter of 2018, HSN is operating under a renewed carriage agreement with a certain distribution partner,” Qurate said. “This agreement provided for improved channel placement and broadcast in high-definition. Based on the terms of the renewed multi-year carriage agreement, HSN capitalized the upfront payment and is amortizing the amount over the life of the agreement, versus its previous convention of expensing the payment associated with the contract terms each quarter.”

“Our solid third quarter results demonstrate continued execution of our strategy to engage our customers with compelling products across multiple shopping platforms,” George said in a canned statement.

“We grew revenue and profitability at QVC US, improved HSN’s sales trend and customer engagement trends … We’re taking steps to more fully leverage the power of our US video commerce platform and accelerate our digital initiatives by combining QVC US and HSN into a new business unit, QXH, a move that we believe will yield new revenue opportunities and improved customer service, as well as operating efficiencies and incremental cost synergies. Qurate Retail is focused on leveraging its unique video commerce model in a retail market that increasingly values engaging mobile and social shopping experiences.”

QVC Honcho Made $7.7 Million Last Year

April 11, 2018

It’s that time of the year, proxy time, when we tear out our hair wishing we had become big company honchos rather than ink-stained wretches. So wanna guess how much the QVC bigwig Mike George raked in last year?

According to a filing with the SEC on Monday, last year the QVC president and CEO received $7.7 million in executive compensation, a big increase over his $5.4 million in 2016. In 2017 he had a base salary of $1.25 million, $4.3 million in stock awards, $2 million in non-equity incentive plan comp and a piddling $171,000 in other comp, chump change.

http://ir.libertyinteractive.com/secfiling.cfm?filingID=1047469-18-2656&CIK=1355096#A2235222ZPRE14A_HTM_H48

Here’s a bit about his employment arrangement:

On September 27, 2015, the compensation committee approved a new compensation arrangement with Michael A. George, the President and Chief Executive Officer of QVC. The arrangement provides for a five year employment term beginning December 16, 2015 and ending December 31, 2020, with an annual base salary of $1.25 million and an annual target cash bonus equal to 100% of Mr. George’s annual base salary.

The arrangement also provides Mr. George with the opportunity to earn annual performance-based equity incentive awards during the employment term, as described in more detail below. In connection with the approval of his compensation arrangement, Mr. George was granted the 2015 Term Options with respect to shares of QRTEA, also as described in more detail below. Mr. George’s compensation arrangement was memorialized in the George Employment Agreement executed on December 16, 2015.

Following its acquisition of HSN, Liberty Interactive Corp. is being renamed Qurate Retail Inc. It will hold a conference call to discuss its first-quarter results May 10 at 11 a.m.

Following prepared remarks, the company will host a brief Q&A session during which management will accept questions regarding Qurate.

The call will be broadcast live via the internet. All interested participants should visit the Qurate 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 Qurate website. The conference call will be archived on the website for one year after appropriate filings have been made with the SEC.

Honcho Says QVC, HSN Won’t Merge

February 12, 2018

We looked up at our TV screen, tuned to HSN, while in the midst of reading The Sunday New York Times and thought we were hallucinating: HSN host Amy Morrison was on a split screen chatting with QVC’s Rick Domeier.

We don’t know if Domeier was trying to be funny when he didn’t respond to Morrison’s comments and questions or if there were technical difficulties and he couldn’t hear her, but the resulting exchange was awkward and painful to watch.

The brief teaming of the two hosts was part of e kickoff of the marriage of former rivals QVC and HSN was this weekend, with both home shopping networks starting to cross-promote and their king, Mike George, allaying fears about the future of the two channels.

In a letter to viewers on HSN’s website, George reminded everyone that QVC’s parent, Liberty Interactive Corp., but not to worry, the two networks would remain separate.

George wrote:

We’re excited to welcome HSN, Ballard Designs, Frontgate, Garnet Hill, Grandin Road, and Improvements to the QVC family. Together, with zulily, we seek to bring joy and inspiration to you, our loyal customers, daily by combining the best of retail, media, and social.

QVC and HSN will continue to have their own distinct personalities—remaining separate brands, with HSN broadcasting from St. Petersburg, FL and QVC from its studios in West Chester, PA.

HSN and QVC have so much in common. We’re both committed to bringing you curated collections of world-class brands and entrepreneurial products presented in fun, engaging ways. We both strive to connect you with new ideas, interesting conversations, exciting personalities, and the hottest pop-culture events via our broadcast channels, websites, mobile apps, social pages, and other touchpoints. And we’re both constantly innovating—always looking for ways to make your experience with us richer and more exciting.

Thank you for your loyalty and commitment to HSN, to QVC, or to both brands. We look forward to continuing to offer you extraordinary shopping experiences.

Mike George

President and CEO, QVC, Inc.

The next few months should be interesting.

And Amy, enough with the extensions.

QVC Posts 3% Sales Increase In Third Quarter

November 10, 2017

Holy crow! QVC had a 3 percent revenue increase in the third quarter, to $1.4 billion, its parent company Liberty Interactive Corp. reported Thursday. This is after several quarters when sales were down.

The dominant domestic home shopping networks also posted a 14 percent rise in its operating income.

“QVC had an excellent quarter, growing constant currency revenue and adjusted OIBDA in every market,” Liberty President and CEO Greg Maffei said in a statement. “We made progress on the acquisition of HSN and expect to close in the fourth quarter.”

QVC saw year-over-year gains in the apparel, beauty, accessories and electronics categories in the third quarter.

But the home category was essentially flat and jewelry declined, according to Liberty.

The average selling price declined 4 percent in the quarter, “primarily driven by product mix within the electronics category, as several successful items sold in the quarter carry lower price points than items sold in the prior year,” Liberty said in its press release.

“We are very pleased with our strong results,” QVC President and CEO Mike George said in a statement.

“Our U.S. business returned to growth and our international segment continued its solid momentum,” he said. “Our performance demonstrates our ability to execute our strategic initiatives to improve product freshness and discovery, leverage our commerce content across platforms, increase customer engagement and attract new customers. We remain excited about the pending transaction to acquire HSNi and the formation of the new QVC Group.”

In the quarter QVC’s number of new customers increased 7 percent.

“As noted last quarter, the U.S. business experienced a systems outage late in the second quarter of 2017, which resulted in an estimated 1 percent shift in net revenue to the third quarter,” Liberty said.

HSN Honchos Out After QVC Acquisition

October 14, 2017

When news broke earlier this year that QVC’s parent company was buying HSN, we knew a lot of executives would be exiting once the reorganization began to merge the two home shopping networks. Well, that other shoe dropped this week.

Liberty Interactive Corp. announced a slew of appointments and promotions.

Not on the list: The honchos at HSN, who will be gone. This includes HSN President Bill Brand, who who have met and interviewed over many years. We will be sad to see him go. But is is typical for the old management team to leave following an acquisition — just like layoffs are common as departments get merged.

http://www.stockhouse.com/news/press-releases/2017/10/12/qvc-group-announces-plans-for-new-leadership-team-and-structure-to-drive-global

HSN has been without a CEO since Mindy Grossman left to head up Oprah Winfrey’s Weight Watchers. And QVC, the domestic channel, has been without a chief forever. Both networks have seen their sales drop during the past few quarters, facing a difficult retail market in America.

Now both those home shopping networks will have heads, Mike George said in Liberty’s press release.

Steve Hofmann was named president of QVC US. He is currently president of QVC International, a unit that has performed very well for Liberty Interactive.

“QVC US brings the QVC shopping experience — combining the best of retail, media and social—to customers in the US,” the press release said. “It is our largest business unit with over $6B in revenue in 2016.”

Mike Fitzharris was named HSN’s president, He is currently CEO, representative director and chairman of QVC Japan.

In addition, Doug Howe was named chief merchandising officer.

And the press release had a goodbye to Brand and his cohorts at HSN.

“I’d like to acknowledge and thank Bill Brand, Rod Little, and Judy Schmeling, who comprise the Office of the Chief Executive at HSNi, who will be stepping down post the transaction closing,” George said.

“They have steered the company well through the changes of the last several months and have been a trusted sounding board to me and our other leaders as we plan for the future. Each has made extraordinary contributions to HSNi, building the company into one of the premier lifestyle retailers. I’m grateful for all their support and look forward to working with them in the coming months to ensure a smooth transition.”

To our surprise, Liberty filed a statement with the Securities and Exchange Commission that included a transcript of George’s comments following the big announcement. We’re not sure if he was talking to Wall Street analysts or employees.

http://www.hsni.com/secfiling.cfm?filingid=950103-17-9965&CIK=1434729

Here’s what George had to say about his execs and their activity in advance of the completion of QVC’s purchase of HSN:

SO THEY’VE BEEN HAVING LOTS OF FUN AND SOME STRESS AND CHALLENGE, KIND OF WORKING THROUGH THAT EFFORT. THINKING ABOUT WHERE THERE ARE OPPORTUNITIES FOR SYNERGIES, FOR COST SAVINGS, BUT ALSO FOR REVENUE OPPORTUNITIES, GROWTH OPPORTUNITIES. SO THOSE TEAMS HAVE BEEN DEPLOYED. THEY’RE HARD AT WORK. A NUMBER OF YOU HAVE BEEN INVOLVED IN THAT EFFORT.

AND THEN AT THE SAME TIME WE’VE BEEN THINKING ABOUT ORGANIZATION DESIGN. HOW DO WE BRING THESE COMPANIES TOGETHER WITH AN ORGANIZATIONAL STRUCTURE THAT WILL MAKE SENSE, THAT WILL LET EACH OF THE BRANDS UNDER THIS NEW COMPANY ACHIEVE ITS FULL POTENTIAL.

Here is George’s shout-out to Brand, et al. What do you think of it?

NOW BEFORE I GET INTO THOUGH, ONE OF THE THINGS I DID WITH THE HSNI TEAM WAS I TALKED A LITTLE BIT ABOUT THE EXECUTIVE LEADERS AT HSN, WHO HAVE BEEN SUCH GREAT PARTNERS TO ME IN TAKING THIS FORWARD. SOME OF THEM WHOM WILL CONTINUE ON IN THE COMBINED COMPANY, AND WE’RE THRILLED ABOUT THAT, SOME OF WHOM ARE MOVING ON.

AND THAT’S THE REALITY OF THIS KIND OF ACQUISITION IS YOU GET SOME GREAT NEW PEOPLE AND YOU LOSE SOME GREAT PEOPLE. AND BILL JUST WARNED ME, HE SAID DON’T GO TALKING ABOUT EVERY PERSON ON THE EXECUTIVE TEAM, JUST KIND OF GET THE NEWS. SO I WON’T EMBARRASS EVERYONE ON THE EXECUTIVE TEAM, LIKE I DID IN THE POWER MEETING. BUT FULL DISCLOSURE, BUT I DO WANT TO JUST TAKE A MOMENT TO APPRECIATE BILL AND ROD AND JUDY.

[APPLAUSE]

THEY HAVE BEEN TREMENDOUS PARTNERS TO ME AND THE WHOLE TEAM AND THEY HAVE BEEN SO FOCUSED ON WHAT’S RIGHT FOR HSN, WHAT’S RIGHT FOR THE NEW COMPANY, WHAT’S RIGHT FOR OUR PEOPLE, AND THEY SHOW UP EVERY DAY TRYING TO MAKE A DIFFERENCE. AND YOU KNOW IT DOESN’T ALWAYS GO THAT WAY, BUT YOU SORT OF TAKE THAT FOR GRANTED HERE AT HSN BECAUSE THAT CULTURE’S DEEP EMBEDDED IN THE COMPANY.

AND SO IT’S BEEN MY GREAT PRIVILEGE AND HONOR TO GET TO KNOW THE THREE OF THEM AND ALL THE MEMBERS OF THE EXECUTIVE TEAM AND AGAIN THRILLED THAT SOME WILL BE STAYING WITH US, BUT OF COURSE ROD, JUDY, BILL, A FEW OTHERS WILL BE MOVING ON AS WE MOVE TO CLOSE. AND ARE JUST GRATEFUL FOR ALL YOU’VE DONE TO SUPPORT THIS EFFORT SO THANK YOU.

[APPLAUSE]

And don’t let the door hit you in the ass on your way out.

However, we are pretty sure that Brand and the gang have nice contracts that give them generous golden parachutes if HSN is purchased.

QVC’s Second-Quarter Sales Dip 4 Percent

August 10, 2017

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.”