Posts Tagged ‘third quarter’

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.”

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QVC, HSN and ShopNBC Should Give Thanks For Home Shopping’s Sea Change: They’ve Attracted Luxury Brands Like Gucci, Badgley Mischka And Stephen Dweck

November 26, 2009

QVC CEO Mike George

We thought we were seeing things a few days ago when we checked ShopNBC’s Web site and saw that it was selling dozens of Gucci watches. What happened, did they fall off a truck? Why was Gucci, a premier luxury brand, being sold on a home shopping network?

Then back in October, we couldn’t believe it when a sharp-eyed poster on QVC’s jewelry forum said that upscale jewelry designer Stephen Dweck, whose chunky gemstone masterpieces are featured in Neiman Marcus, was on the No. 1 home shopping network’s schedule. THE Stephen Dweck?

We checked QVC’s program guide ourselves, and there it was: Dweck was doing a lower-priced jewelry line for QVC called Dweck’s Diamonds. His Neiman Marcus pieces didn’t even have diamonds. The high-end stuff is made with semi-precious stones.

Also in October, we were checking the press releases on HSN’s Web site when we saw the network had struck a deal with one of the most famous and elite fashion houses: Badgley Mischka, designers of bejeweled gowns for the red carpet and celebrities.

We’ve written bits and pieces of this during the past two months, but we thought we’d tie it all up in a tidy package for Thanksgiving: There has been a sea change in the home shopping world, prompted by the disastrous economy and the crash of the luxury market.

Yes, home shopping networks have seen their sales hurt by the economy, like everyone else. But they claim they are still managing to steal market share from brick-and-mortar retailers. In fact, QVC is making a full-frontal assault on them this Black Friday, with 28 hours of special products and programming stunts starting Thanksgiving night.

The consumer press will continue to mention “cubic zirconia” in every story it writes about QVC or HSN, oblivious to the fact that some of the most esteemed names in fashion, jewelry and cosmetics — brands you find in Saks, Bloomingdale’s and Neiman Marcus — are plying their wares on the aforementioned home shopping channels.

ShopNBC CEO Keith Stewart

Male journalists are blind to this. You still have the nerds at Gawker, a snide Web Site for the navel-gazing media, chiding HSN for selling “useless crap.”

If you have ever seen how male journalists dress or their fashion and style sensibilities, you will realize that you can’t expect them to know names like Badgley Mischka, Judith Ripka, Robert Lee Morris, our fellow Montclair, N.J., resident Bobbi Brown, Yves Saint Laurent, Smashbox, Lancome and Dweck. And these brands and artists don’t represent “useless crap.”

Luxury-good makers are hurting, and they need to make up their loss in sales. So they are turning to outlets like QVC, as CEO Mike George explained at a recent Liberty Media conference, as outlets to distribute new lower-priced lines to the masses. George cited fashion designer Vivienne Tam’s QVC alliance at the meeting held in Manhattan by his parent company, Liberty.

“This complete implosion of luxury retailing in America has caused all these folks to rethink their business model,” George said.

And that means partnering with QVC, HSN or ShopNBC.

As we said, it will take the consumer press years to figure out that home shopping channels are distribution powerhouses that have undergone a transformation, in part because of the infllux of talent like a Morris, who does couture jewelry for designers like Donna Karan and RLM Studio sterling silver jewelry for QVC.

The Big Three — QVC, HSN and ShopNBC — are aggressively trying to broaden their audience and potential customer base, those who don’t normally watch any of these three networks. That means the three are actually “programming” the channels, doing “shows” that have entertainment value, not just product shilling, so they will attract non-QVC or non-HSN watchers.

We remember once interviewing a QVC exec years ago and asking what the network’s ratings were. He said ratings were irrelevant: QVC was only concerned about how many products were sold in an hour.

HSN CEO Mindy Grossman

That’s a totally different tune from what we heard recently from QVC’s George, and from the strategies that HSN CEO Mindy Grossman and ShopNBC CEO Keith Stewart have initiated.

Like traditional TV networks, the home shopping players want viewers to “sample” a QVC or an HSN. These new audience members, hopefully, will then see products that they want to buy.

For example, singer Natalie Cole recently did a live concert on HSN to promote a new Holiday CD set she is selling on the channel. If you’re a fan, you might tune in to HSN to see her, and then actually decide to purchase her CD. Artists such
as Jose Feliciano have also performed live on QVC.

QVC alum Stewart on a recent third-quarter conference call pointed out that actress-entrepreneur Suzanne Somers, who came to ShopNBC from HSN, had succeeded in attracting new viewers to Minneapolis-based ShopNBC because she was “entertaining.” And these networks want new eyeballs.

And home shopping networks’ capacity to reach millions of consumers and do fulfillment of orders has not been lost on magazine publishers, celebrities or cable’s reality TV stars. With circulation falling, women’s magazines such as Lucky, Allure, Glamour and Self are partnering with HSN to sell subscriptions.

And stars have seen the light. In a recent interview in Oprah Winfey’s O magazine, Joan Rivers, who’s had a jewelry line on QVC for almost 20 years, told O she was on home shopping when “nobody except dead celebrities was doing merchandise on TV.”

Nowadays, it’s hard to find a celebrity or TV star who doesn’t have a home shopping line. Even Madonna was interviewed on HSN when she was selling her children’s book.

Here’s a partial list:

Paula Abdul, HSN, formerly “American Idol,” Fox

Rachel Zoe, QVC, “The Rachel Zoe Project,” Bravo

Isaac Mizrahi, QVC, “The Fashion Show,” Bravo

Padma Lakshmi, HSN, “Top Chef,” Bravo

Ramona Singer, HSN, “The Real Housewives of New York City,” Bravo

Susan Lucci, HSN, “All My Children,” ABC

Carson Kressley, QVC, “How to Look Good Naked,” Lifetime Television

Dr. Robert Rey, ShopNBC, “Dr. 90210,” E! Entertainment Television

Tori Spelling, HSN, “Tori & Dean: Home Sweet Hollywood,” Oxygen

Paula Deen, QVC, Food Network

Rachael Ray, QVC, “The Rachael Ray Show,” syndication

Ingrid Hoffmann, HSN, Food Network and Univision

Home shopping is a big business. ShopNBC is the also-ran in the group, but in the third quarter Stewart made some nice progress cutting its losses. Sales for the Big Three were all down, but down less than previous quarters.

And we are not talking chump change for these networks. The three home shopping channels generated $8.3 billion in net revenue in 2008. QVC domestic posted $4.9 billion, HSN netted $2.8 billion and ShopNBC had $568 million.

Even with revenue still slipping this year, for the first nine months QVC had revenue of $3.308 billion; HSN had net sales of $1.4 billion; and ShopNBC had $372.6 million in net sales.

Happy Thanksgiving!

Get Your Gucci Watches At ShopNBC

November 21, 2009

Talk about high end. ShopNBC, which sees itself as the place for premium watches, is now selling a wide selection of Gucci watches.

The No. 3 home shopping channel has about 50 men’s and women’s Gucci watches on its Web site, as well as several Gucci perfumes.

The watches range in price from $460, for one with a rubber strap, to $1,330, for a stainless steel number with diamonds and a mother of pearl face.

Our favorite is the twill fabric bracelet watch, which has the trademark Gucci logo all over it. That watch is $540. Just in case you’re looking for a Christmas gift for us.

During ShopNBC’s third-quarter call last week, CEO Keith Stewart said that the network has positioned itself as “the definitive destination for watches,” with watch sales up 66 percent in the quarter.

ShopNBC May Partner With Bravo, Whose Reality TV Stars Like Rachel Zoe And Isaac Mizrahi Already Have Deals With QVC And HSN

November 18, 2009

ShopNBC apparently has something cooking with the cable network Bravo, but we couldn’t find out many details Wednesday.

During a third-quarter conference call ShopNBC CEO Keith Stewart said that the network is looking to partner with Bravo to sell some of Bravo’s “content” also have a presence on the channel.

“I can’t speak for NBC, but I do talk to them quite frequently, and we are in active conversations to work with some of their properties, like Bravo,” Stewart said. “To the extent that we can sell some of the Bravo content and also be on some of their channels, that will be a cost-effective way to do it.”

Bravo is a unit of NBC Universal, which is expected to be purchased by cable giant Comcast. NBC has a minority stake in ShopNBC.

A raft of the stars of Bravo’s many reality TV stars have lines on home shopping networks. Celebrity stylist Rachel Zoe of “The Rachel Zoe Project” sells clothes and accessories on QVC, and Heidi Klum of Bravo’s former hit, now Lifetime’s “Project Runway,” had a jewelry line on QVC until a suit agains her by Van Cleef & Arpel put the kibosh on that.

Fashion designer Isaac Mizrahi, of Bravo’s “The Fashion Show,” is doing a line of apparel, accessories and home goods that will debut next month on QVC.

On HSN, Ramona Singer of Bravo’s “The Real Housewives of New York City” has a fine jewelry line, while Padman Lakshmi of Bravo’s “Top Chef” is hawking teas and herbs.

On the conference call, Stewart only made one more comment about the potential Bravo arrangement, and ShopNBC wasn’t “adding any color,” as Wall Street analysts say, after the call.

“Now all that said, NBC is a stand-alone unit and they need to make money,” Stewart said. “And we unquestionably need to make money. So to the extent it compromises our margins to you, it would not be a good business decision. But to the extent it does work for both of us, we’ll launch some of the content that NBC will offer.”

General Electric and NBC currently own about 32.5 percent of ShopNBC on a fully diluted basis of 37.6 million shares. NBC’s 6.4 million shares represent 16.8 percent ownership and GE’s 6 million common stock purchase warrants represent 15.7 percent.

ShopNBC Got Its Foxes Mixed Up, So Strike Our Blog About Hot Actress Megan Fox Doing A Handbag Line For The No. 3 Home Shopping Network

November 18, 2009

We guess it was a Freudian slip, or wishful thinking, but ShopNBC CEO Keith Stewart got the wrong Fox when he talked about a new handbag line coming to the No. 3 home shopping network.

It’s not sexy actress Megan Fox who is doing it, it’s handbag veteran Emma Fox.

During a third-quarter conference call Wednesday, Stewart said that his network was debuting a number of new fashion lines in the fourth quarter, including “Megan Fox handbags.”

That got our attention. Another celebrity doing a home shopping line.

Well, it turns out that Stewart misspoke and got his Foxes mixed up. It is handbag designer Emma Fox that will have the ShopNBC line, not Megan.

For some reason, Stewart has Megan Fox on the brain.

So about our post about Megan Fox doing the handbags, strike that. But it wasn’t our bad, it was ShopNBC’s.

But here’s the dope on up-and-coming designer Emma Fox. ShopNBC will be one of the first retailers to have her purses, and Emma Fox’s company will have a link to ShopNBC on its Web site two weeks befoe the first show. Fox will also include ShopNBC on its Facebook page and on Twitter.

The other retailers that will be launching Emma Fox handbags are Nordstrom, TSC-Shopping Channel in Canada and specialty stores.

Are We Getting HSN Shop By Remote? We Have To Call Comcast, Our Cable Provider

November 12, 2009

HSN’s Shop by Remote is the only service of its kind in the United States, according to HSN CEO Mindy Grossman. And it’s expanding its distribution, which we’re sure will thrill husbands across the nation.

It’s obvious how it works: You can order HSN goods by pushing buttons on your remote in some cable systems. No need to get up and call on the phone or order on your computer.

Our parents have Shop By Remote, and they are Cablevision Systems’ customers. Our dad was not so happy when this service was added, but our mom sure was.

During a third-quarter conference call Thusday, Grossman said that the service will be rolled out in more cable systems.

”Distribution for this HSN interactive shopping service continued to grow, with the new launch to more than 7 million Comcast subscribers and millions more to be rolled out in the coming year,” she said.

We’re Comcast customers, but we don’t think we have HSN Shop by Remote yet. What’s up with that?

Liberty Media, QVC’s Parent, Sets Nov. 9 Third-Quarter Earnings Release

October 22, 2009

QVC’s parent Liberty Media will release its third quarter earnings Nov. 9 at 11:30 a.m., officials said Thursday.

Liberty Media president and CEO Greg Maffei will host the call.

Does HSN Miss Suzanne Somers? We’ll Find Out When HSN Reports Third Quarter Earnings Nov. 12

October 22, 2009

The No. 2 home shopping network HSN will report its third-quarter earnings Nov. 12, before the market opens, the company said Thursday.

CEO Mindy Grossman and Judy Schmeling, executive vice president and chief financial officer, will hold a conference call at 11 a.m. Eastern Time to review the results.