Posts Tagged ‘ValueVision’

ValueVision, ShopNBC, ShopHQ, Evine Live?

November 19, 2014

Honestly, we’re not sure if we remember all of the monikers that the No. 3 home shopping network has had over the years. And we don’t like the latest one.

It started out of ValueVision. We think it next changed to ShopNBC, but we may have missed a name here.

Then it was rebranded as ShopHQ under Keith Stewart’s reign, and we actually that was a pretty good name.


But on Tuesday the new management at ShopHQ, led by Mark Bozek, announced that it was renaming the network yet again, immmediately, as Evine Live Inc., “marking an important next step in the Company’s long-term strategy to become a true digital commerce company.”

Effective Thursday, the company’s NASDAQ trading symbol will also change from VVTV to EVLV.

“EVINE Live will focus on all things digital,” the press release said. “The ‘Es’ that bookend the EVINE Live brand speak to the ease, exclusivity and energy of this new entertaining consumer experience. The inclusion of the word ‘Live’ is all about real-time impulses to act and interact on all digital platforms.”

You got that corporate speak?

“On the heels of a solid third quarter, we strongly believe definitive change and innovation are necessary to build on our recent momentum and drive the Company to the next level,” Bozek, CEO of EVINE Live, said in a canned statement.

“We believe that fully embracing this new transformation will enable EVINE Live to forge new paths and new relationships that allow us to be far more competitive, far more creative, and far more disruptive on all our platforms,” Bozek said. “EVINE Live has the opportunity to be fearless in our strategies to transform the worlds of retail and entertainment while, at the same time, driving greater customer engagement.”

The network said that it expects to transition from doing business as “ShopHQ” to “Evine Live” over the coming months, with the complete rebranding planned to take place in the first half of next year.

Russell Nuce and Mark Bozek

Russell Nuce and Mark Bozek

In the coming months, the channel intends to introduce new proprietary brands from the worlds of fashion, beauty, jewelry, home and fitness.

“This new approach should enable us to build a stronger foundation for long-term growth,” added Bozek.

The company also announced that Russell Nuce has joined as its Chief Strategy Officer, reporting to Bozek.

“Russell has been a longtime colleague whose experience in strategy, licensing, corporate law and entertainment will help provide the architecture for all that comes next,” Bozek said.

We haven’t listened to the analyst call yet about this news, and the network’s third-quarter results. More on that in another blog.

New Sheriff In Town At ShopHQ, Boots Should Be Shaking

June 25, 2014

So ShopHQ’s dissident shareholders have succeeded in their quest, and dethroned CEO Keith Stewart. The new sheriff in town is Mark Bozek, a former HSN chief. Now what?

In their many regulatory filings and letters to shareholders, The Clinton Group made it clear it was unhappy with ShopHQ’s product mix. We don’t think you’ll be seeing hours and hours — and days — of Invicta watches in the near future.

Meet Mark Bozek

Meet Mark Bozek

The Clinton Group told other shareholders that it didn’t make sense to sell merchandize that consumers can readily purchase in a brick-and-mortar store.

Next, the president of ShopHQ under Stewart, Bob Ayd, should probably be sending his resume out, unless he has a prior relationship with Bozek that we don’t know about.

The dissidents also criticized the No. 3 home shopping network’s location in remote, and freezing, Minneapolis. The network will likely open up, at the very least, an office in Manhattan.

If we were a ShopHQ vendor, we’d be worried right now. We don’t have the sales figures to know how Chuck Clemency or Paul Deasy’s jewelry sells, but the new ShopHQ leadership will give it a close look, we’re sure.

The Clinton talked about creating proprietary brands, but we assume they will want to launch their own. We don’t know how loyal they will be to the old ones.

And as for the network’s hosts, we suspect Bozek will give them a close look to decide if they should stay or not.

Here’s the 411 on Bozek:

Mr. Bozek is the former CEO of Home Shopping Network (HSN). Mr. Bozek generated over $6 billion in sales and $1 billion in profits while managing 6,000 employees at HSN. Mr. Bozek transformed HSN’s merchandising through innovation and strategic leadership.

Mr. Bozek built multiple $100+ million proprietary brands while running the company, including Ingenious Designs. He also was responsible for the development and growth of HSN’s current top selling brands including Andrew Lessman, Diane Gilman, Wolfgang Puck and Serious Skin Care.

In 1998, Bozek launched He grew this online business to over $100 million in 18 months. Mr. Bozek was also responsible for the international launches of HSN in Japan, Europe and China.

Mr. Bozek’s merchandising and media success began as a producer at Fox Television and then as a Senior Vice President at QVC. Mr. Bozek was at Fox Television at its inception in 1998, where he was a three-time Emmy nominee. Bozek has previously served as a director of Sykes Enterprises.

ShopHQ, Cinton Group Spar Over Critical Research Report

June 8, 2014

ShopHQ’s dissident shareholders have gotten some support from a third party, but the home shopping network pooh-poohed the report.

The Clinton Group Inc. said Friday that a research firm, ISS Proxy Advisory Services, has recommended yesterday that ShopHQ stockholders support change in the composition of the home shopping network’s board by voting on the GOLD proxy card (namely, Clinton’s nominees) at this year’s annual meeting.

ISS advises about 1700 institutional investors, pension funds and mutual funds across the globe on annual and special meeting votes.

ShopHQ quickly issued its own press release dissing ISS’s findings.

In its report, ISS noted that Clinton Group had “made a case for change at the board level [and] provided the outline of a strategic plan which appears to address the most significant failures identified in the course of this proxy contest.”

Therefore, ISS recommended that its clients vote for none of the incumbent directors and instead vote for the Clinton Group’s slate.

“We are pleased that ISS recognizes the importance of change at ValueVision (ShopHQ’s corporate name,” Clinton Group President Gregory Taxin said in a canned statement. “ValueVision has a terrific opportunity to build a profitable and valuable business. We believe that new directors can help ensure ValueVision takes full advantage of this opportunity and creates significant value for shareholders.”

ISS’ research report also said:

Clearly, ValueVision is not monetizing its distribution as effectively [as HSN and QVC]. … The disconnect in household monetization appears to be driven by ValueVision’s misaligned merchandise mix, a lack of proprietary brands and outdated programming.

ValueVision has been shifting product mix over the past several years, but the change has been slow and the company missed its own commitments for greater category shift by 2013.

[A]nother factor lowering ValueVision’s per household monetization compared to peers is its product mix that relies heavily on nationally available brands. … A reliance on nationally available brands does not appear to be a long-term viable strategy.”

[L]ooking at the programming [schedule] … it is easy to see why QVC and HSN are attracting more viewers to [their] more differentiated, diversified and engaging content. … [T]he company needs to diversify and create more engaging programming and programming personalities.

In order for ValueVision to generate significant operating leverage off its high percentage of fixed costs, the company needs to increase revenues through improved household monetization.

According to ISS, the Clinton Group “has laid out a plan to create proprietary brands, improve product mix and develop creative programming, which appears needed at ValueVision.”

The company’s annual meeting will be held on June 18.

So what did ShopHQ have to say about all this?

We strongly believe that ISS reached the wrong conclusion in failing to recommend that shareholders elect ALL of ValueVision’s eight, highly qualified director nominees.

We believe that shareholders should seriously question ISS’s report due to numerous material errors and omissions:

In its very first “Key Takeaway,” ISS overstates Clinton’s share ownership by no less than 250%;

ISS fails to disclose that Clinton, during the course of its campaign to take control of ValueVision’s Board, has reduced its ownership position from a peak of 5.9% to 4.0% of the Company’s outstanding shares, according to its latest filings;

Despite acknowledging that ValueVision stock, under the current Board and management team, has outperformed HSN and QVC by 120.6 and 90.7 percentage points respectively, since August 15, 2012, ISS recommends giving 50% of the Board seats to a dissident shareholder that owns only 4% of the Company’s shares, which is substantially less than the Company’s CEO;

ISS incorrectly states that ValueVision has only two proprietary brands, when in fact ValueVision has over 20 proprietary brands, reflecting approximately 25% of total sales, and made this fact clear to ISS;

ISS makes claims for the qualifications of the Clinton nominees it recommends, despite the fact that three of these nominees’ — Messrs. Bozek, Beers and Siegel — most recent experience in eCommerce was leading a startup called Evine that, despite launching more than two years ago, consists of only a single page that lacks any shopping functionality; and

ISS ignores Clinton’s materially dismal performances at other retailers, particularly their most recent experience at Wet Seal, which demonstrates a severe lack of understanding around the basics of retail strategy.

In considering which directors are better qualified to preserve and increase value, shareholders should seriously question ISS’s recommendation to give 50% board control to a dissident shareholder that owns substantially fewer shares than the Company’s CEO, and has been steadily selling down its position since it first publicly announced its campaign. In addition, shareholders should consider that neither ISS nor any of its analysts have any experience in eCommerce or the Company’s business.

We also question the basis for the analysis supporting ISS’s conclusion about “needed change” in proprietary brands, product mix and programming. In fact, revenue from ValueVision’s more than 20 proprietary brands grew 67% in the last two fiscal years, and now represents approximately 25% of our product mix in fiscal 2013.

The ISS report raises questions as to how sharehholders can be expected to rely on an ISS recommendation that, in its very first “Key Takeaway,” materially overstates Clinton’s share ownership.

For the record, as noted in many of Clinton’s and ValueVision’s filings, letters and press releases, Clinton does not, and has never, owned 10% of ValueVision’s shares. This is either an egregious mistake by ISS, or an indication that Clinton is still working in concert with Cannell Capital, which would be a violation of the SEC disclosure rules.

We note that Cannell Capital, which had previously formed a 13-D group with Clinton, filed a letter criticizing the Company earlier this week. Shareholders should question whether ISS is making its recommendation based on flawed facts or on information that has not been disclosed to other shareholders.

The election of Clinton’s nominees could disrupt the progress to date of creating greater value for shareholders, derailing the Company’s progress and momentum. We urge ValueVision shareholders to support the Board that is committed to enhancing value for all shareholders.

For example, ValueVision’s Board and management team have transformed the Company over the past five years through the continued successful execution of ValueVision’s strategy, and are continuing to deliver positive results.

Significantly diversified and broadened its merchandise offerings;

Reduced the average selling price to enable customer growth;

Increased customer count from approximately 754,000 in 2008 to 1.4 million customers now;

Increased net sales by 6% and net units shipped by 28% in the first quarter of 2014 alone;

Reduced the cost per home over the last six years from $1.72 to $1.12;

Dramatically improved the customer experience and satisfaction levels;

Streamlined company-wide operations;

Enhanced fulfillment and customer service capabilities;

Improved the quality of the Company’s TV distribution footprint while significantly reducing the cost; and

Enhanced the stability and flexibility of ValueVision’s balance sheet, resulting in stronger financial performance.

Even ISS acknowledges that ValueVision’s record of delivering shareholder value is superior. Listen to what the independent experts are saying about ValueVision. All sell-side analysts that cover ValueVision have a BUY rating post Q1 2014 earnings1:

“Improvements in recent quarters appear to be driven by greater depth of SKUs in each category, thereby reducing concentration risk in product offerings. Broader product assortments are driving customer growth — YOY customer growth has trended from 7% in Q1, 22% in Q2, 20% in Q3, and 30% in Q4 to 19% in Q1. A bigger customer base increases the likelihood of sustainable long-term revenue growth, which is the driver of VVTV’s decision to lower ASPs by emphasizing products that appeal to a larger audience.” – Dougherty & Company on May 22, 2014

“The company will leverage the sales growth more in F2015 and experience very high earnings growth. We think the long-term investment thesis is intact which is that the company can grow revenue by reducing ASP, increasing transactions and the higher revenue will leverage largely fixed operating expenses leading to strong earnings growth. With ample price appreciation potential to our new price target, we are maintaining our BUY rating.” – Feltl and Company on May 22, 2014

“VVTV reported solid Q1 results… As evidence that the strategy to broaden the merchandise assortment and lower average prices is working, new customer acquisition was up 19% in Q1, paving the way for strong revenue growth in future quarters. ShopHQ has several brands and partnerships slated to launch this year: notably, a partnership featuring Shark Tank’s Mark Cuban that is being worked on for the summer.” – Craig-Hallum on May 22, 2014

“Mobile continues to grow — underscoring this mega trend in consumer behavior. We note that eCommerce sales in total were about 45% of the company’s total revenues, of which 32% (or 14% of the company’s total revenues) were conducted via a mobile device. Mobile strategies put into place last year are paying off in driving penetration via mobile. For this year, the company intends to continue these enhancements aimed at driving customer engagement and purchase frequency.” – Piper Jaffray on May 21.

The Clinton Group pooh-poohed all that.

“I read with interest ValueVision’s press release today in which the Company expresses its view that ISS does not understand the Company or its industry,” Taxin said.

“While shooting the messenger is always tempting, it is completely unwarranted in this instance. The ISS lead analyst, a CFA charter holder and former media and advertising research analyst for Lazard and Citibank, is eminently qualified to understand, and did understand, the issues in this important proxy contest.”

ShopHQ’s D-Day With Dissident Shareholders Is March 14

January 26, 2014

ShopHQ’s battle with a group of dissident shareholders, who want to unseat the shopping network’s current management — including CEO Keith Stewart — will come to a head March 14.

That’s when the network, whose corporate name is ValueVision Media Inc., has set a special shareholder meeting to vote on some the The Chinton Group’s proposals, which include ousting most of the channel’s board and essentially taking control of the company.

ShopHQ filed a proxy statement it is sending out to its stockholders, asking them to vote down the The Clinton Group’s, with the Securities and Exchange Commission Friday.

You can read all the dirty details here.

But here is some of the dish here, where ShopHQ tells its shareholders, “The future of ValueVision is in your hands.”

“Your Board of Directors is deeply committed to the Company, its shareholders and enhancing shareholder value,” ShopHQ says in its proxy statement.”

Keith Stewart in happier days

Keith Stewart in happier days

Company officials defended their track record at the home shopping network.

“We have focused on four key growth drivers: (1) broading and diversifying our product mix with a compelling assortment of national brands and proprietary products; (2) increasing our visibility to customers by expanding and optimizing our TV distribution platform; (3) growing our customer base through new customer acquisition, and increased purchase frequency and retaining existing customers reflecting improvements to overall customer experience; and (4) being a Watch & Shop Anytime, Anywhere experience through continued enhancements to our internet and mobile platforms,” ShopHQ said.

ShopHQ then went on to criticize The Clinton Group.

“In the Board’s opinion, the Shareholder Group’s proposals are not in the best interests of ALL shareholders of the Company, but rather were made in furtherance of the Shareholder Group’s own interests. If the Shareholder Group, a minority group of shareholders beneficially owning approximately 9.8% of the Company’s shares, were to succeed in this proxy contest, then the Shareholder Group’s nominees would control over 80% of the seats on your board.”

“The Shareholder Group has not offered to purchase a controlling interest in the Company nor offered to pay the Company’s shareholders any control premium for the privilege of having the Shareholder Group’s nominees control your board. For these reasons, among others, the Board is soliciting proxies against the Shareholder Group’s proposals.”

In November The Clinton Group went after ShopHQ’s management, criticizing the progress, or lack thereof, of, of the No. 3 home shopping network.

In a nutshell, the group is looking to replace a good number of the network’s with its own crew, which includes some rather notable people, including Mariah Carey’s ex-husband, music mogul Tommny Mottola; he-man reality TV producer Thom Beers; and ex-HSN CEO Mark Bozek.

According to ShopHQ’s SEC filing, Stewart received $1.566 million in compensation in fiscal 2013.

We’ll see how this plays out.

ShopNBC Getting New Moniker: ShopHQ

May 23, 2013

ShopNBC is taking the “NBC” out of its name, in part to avoid paying $4 million a year in license fees to the Peacock Network to use the name.

ShopNBC, once known as ValueVision, will be called ShopHQ — “Your Headquarters for All Things Shop.”

ShopNBC broke the news Wednesday, the same day it released its first-quarter earnings.

“The visual experience of the new brand begins today on TV, online, mobile and social platforms, with a gradual transition to the new brand and Internet URL to be completed over the balance of the fiscal year, supported by a targeted, customer marketing campaign,” ShopNBC said in its press release.

The new website is

ShopNBC had actually announced its planned name change three years ago, but at that time did not have the new moniker yet.

The No. 3 home shopping network said it conducted research and vetting on the new name in partnership with Landor Associates, a global strategic branding and design firm.

The Landor team worked with ShopNBC to develop and validate a name and positioning that would resonate with viewers, so the release said.

“The new brand leverages the business’ core identity of ‘Shop’ and layers on simplicity, comfort and strength,” ShopNBC said in corporate speak. “It also clearly states the aspiration of making ShopHQ a shopping destination. Starting today, customers will begin to see the new name and logo alongside the current logo, with a gradual transition to the new brand. A variety of on-air marketing promotions are planned over the remainder of the year, to educate viewers and make them comfortable with the transition.”

ShopNBC CEO Keith got more than his two cents in.

“Over the past few years, under a new management team, we have substantially expanded our product assortment, enhanced the customer experience and have grown our customer base to 1.2 million customers,” he said in a canned statement. “Our customers are purchasing more frequently, are enjoying a steadily improving shopping experience and are more engaged than ever. The progress we have made makes this the right time to take control of and invest in our own brand.”

Yada, yada, yada.

“The ShopHQ brand clearly communicates to current and potential customers that we aim to be their place for shopping, wherever they are and whenever they need us — on TV or online and across a broad array of merchandise categories,” Stewart said.

“Our research showed the brand has familiarity, and provides a clear, focused and empowering foundation for our Company and its future. This is an important step in the long-term building of our business, our customer base, and vendor relationships that allows us to control the brand equity we are building. While we value the relationship with our friends at NBCUniversal, it was the right time for our company to branch out and establish our own brand.”

In a separate press release on the company’s earnings, ShopNBC Chief Operating Officer Carol Steinberg explained the dollars-and- cents reasons for the change: The money ShopNBC has to pay NBCU to use “NBC” as part of its name. NBCU is part of Comcast, a major ShopNBC shareholder.

“We believe our business has evolved to the point where developing our own brand is the logical next step for the company,” Steinberg said. “Taking ownership of our brand empowers us to shape our future, to build brand equity that we control, and to eliminate $4 million in annual license fees. We have developed a comprehensive plan with the transition to ShopHQ occurring over the course of this fiscal year, including a range of initiatives aimed at ensuring a smooth customer experience.”

ShopNBC has been operating under the ShopNBC name since June 2001m, and its current license agreement expires Jan. 31 next year.

Stewart also sent an email to ShopNBC customers like us explaining the name change.