Home Shopping Giants Look for Smaller Prices


The three top home-shopping companies — HSN,
QVC and ValueVision International (operator of
ShopNBC) — all closed out the first half of the year
focused on reducing the average price of their wares.

The effort reflects a reduced dependence on highpriced
consumer electronics and less-expensive but
more-profitable items like jewelry, watches, fashion
accessories and home-décor products.

HSN led the way, with a 4% drop in average price per
unit at the end of June, while units sold rose 6%. That
translated into a 4% bump in net sales to $1.5 billion
and a 6% increase in adjusted EBITDA to $110 million.

At ValueVision, which was the last to report
earnings on Aug. 15, the average price point plunged by
11.7% while units sold increased 12.7%. Still, net sales
fell about 1.1% in the first half at ShopNBC, while adjusted
EBITDA declined 4.5% for the period.

On a conference call with analysts on Aug. 15 to discuss
quarterly results, ValueVision CEO Keith Stewart
said that efforts to broaden the product mix are beginning
to pay off. In the second quarter, sales of watches
increased by the double-digits as did sales of beauty,
health and fitness products. In the fashion accessories
category, revenue rose by nearly 40%.

As usual, home-retailing giant QVC proved to be the
exception. QVC, which is the largest of the three home
shopping networks, increased its average price point
by almost 5% in the first half of the year, while units
shipped were flat. Still, QVC reported strong financial
performance — revenue was up 4% and adjusted operating
income before depreciation and amortization
(OIBDA) increased 6% in the first half of the year.