QVC, HSN merging to battle Amazon
NEW YORK – QVC and Home Shopping Network, two of the most famous Home TV poles combine to show more aggressive growth by Amazon (AMZN) and consumption patterns by switching to Internet sales.
Interactive Freedom (QVCA), owner of QVC and already has 38 percent of HSN, will buy the rest of the Home Shopping Network for about $ 2.6 billion in a stock agreement.
The purchase comes a few months after the release of Mindy Grossman as CEO of HSN to take the reins of weight watchers. Under Grossman, HSN has worked to build its presence in e-commerce and become a lifestyle network.
It is now called half of its e-commerce business volume with more than 50,000 products on its website and broadcast to more than 90 million homes.
QVC and Home Shopping Network have faced weak sales because Amazon dominates online shopping.
“They’re a little late in the arena dancing online, but they do now,” said Craig Johnson, president of Customer Growth Partners, a retail research consultancy.
A key focus will be to offer exclusive and patented products for essential value. Otherwise, he said, competitors, including Amazon and Walmart, will be hard to beat online.
“It was a difficult time,” admitted Rod Little, chief financial officer and interim director HSN during a conference call Thursday to discuss the case. “We’re not satisfied with performance. That’s part of the reason we’re here today, I guess.”
Libertad, which has a stake in HSN since 2009, said buying the rest of the company would increase the combined company’s e-commerce capabilities, reduce costs and provide marketing opportunities, among other benefits.
“Increasing the scale of this combination will allow us to compete more effectively, we think, in a retail and digital environment evolving and changing,” said Greg Maffei, CEO of Freedom.
Combined, companies will serve nearly 23 million customers worldwide and ship over 320 million packages a year, said Mike George, President and CEO of QVC. QVC is stronger in fashion and beauty, said, while HSN in areas such as electronics, exercise and health.
George said the combined company will generate online sales of $ 7.5 billion and 4.7 billion mobile sales, which rank behind Amazon and Walmart (WMT) in terms of dollar value e-commerce transactions.
“By combining companies, we believe we can accelerate innovation, enhance customer experience, increase customer value and put us in an even stronger position to help shape and direct the generation of shopping in the country,” George, who will lead the combined company on duty.
Consumable brands include Home Shopping Network Home Furnishings Frontgate Provider and Home Decor Garnet and Garnet Hill. Properties include QVC clothing seller Zulily and invitation site Avoid online.
Libertad, based in Englewood, Colorado, will issue 53.4 million common shares of Series A QVC shareholders to HSN. He said Thursday that this is equivalent to paying $ 40.36 per share for HSN Inc. of St. Petersburg, Florida.
It would be a premium of 29% for the population. Shares of HSN increased $ 10.30 or 33%, to stand at $ 41.60 in morning trading.