Stopped at Home
By Linda Moss -- Multichannel News, 5/16/2006 3:38:00 PM
Unable to find a buyer for the money-losing business, The E.W. Scripps Co. is shutting down its Shop at Home network and Web site (www.shopathometv.com), officials said Tuesday.
The Nashville, Tenn.-based home shopping network and its online outlet, ShopAtHomeTV.com, will cease most operations June 22. Its 660 full-time employees, who will lose their jobs, were notified of the closing Tuesday.
Shop at Home, which has lost $84 million during the past four years, will remain in business until June 30 so it can fulfill and deliver orders placed by customers during the final days of the channel’s and Web sites’ sales. The network has 55 million full-time equivalent subscribers.
In addition to being paid during the 60-day Worker Adjustment and Retraining Notification Act period, Shop at Home’s employees will receive severance packages -- a minimum of nine weeks’ pay, extended medical benefits -- and career-transition services from Scripps.
Scripps bought Shop at Home in two transactions for a total of $285 million, getting controlling interest in the network in October 2002 and acquiring the remaining minority interest in the channel, as well as five Shop at Home-affiliated TV stations, in April 2004.
Scripps expects to register an after-tax loss in the second quarter of up to $60 million, reflecting operating results, cash expenses related to closing the business and a partial write-down in the value of Shop at Home’s assets.
Earlier this year, Scripps’ board authorized management to pursue a sale of Shop at Home. But there was “an absence of a suitable buyer,” the company said Tuesday.
“This is not the outcome we had hoped for when we acquired Shop at Home nearly four years ago,” Scripps CEO Ken Lowe said in a prepared statement. “Despite the best efforts and fine work by many dedicated people, Shop at Home was unable to surmount some fundamental weaknesses that have blocked its path to profitability.”
Scripps had some of the talent from its cable networks, such as Food Network’s Emeril Lagasse, sell products on Shop at Home. But that strategy didn’t stem the losses at the electronic retailing outlet.
Scripps plans to sell its five Shop at Home-affiliated TV stations, and it plans to keep them on the air after Shop at Home’s broadcast’s stop. The stations are in San Francisco; Boston; Cleveland; Raleigh-Durham, N.C.; and Bridgeport, Conn., reaching 5 million homes.
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