It’s been a tough couple of months for ValueVision Media Inc., which owns and operates ShopNBC.com. But as the company goes forward it will concentrate on the Internet to help turn around its financial performance, interim CEO John Buck told analysts on the company’s recent third quarter earnings call.
“Our Internet business grew 18% over the prior year and is now 28% of our merchandise sales,” Buck told analysts. “We have a network that reaches nearly 70 million households and an Internet business of over $200 million in revenue, which continues its rapid growth.”
In the third quarter web sales rose by 18% to about $51 million from $43.2 million in Q3 of 2006. At the same time ValueVision, No. 64 in the Internet Retailer Top 500 Guide, reported a net loss of $5.7 million on revenue of $184.8 million, compared with a net loss of $3.1 million on sales of $184.9 million in Q3 of 2006. The company also is looking for a new permanent CEO following the departure of William Lansing and is in the midst of a $10 million cost-cutting program.
To expedite the turnaround, ValueVision will concentrate on new Internet initiatives, including the continued development of ShopNBC.tv, a new microsite that lets viewers choose to watch shows by category, host and brand and complete an e-commerce transaction. “Our Internet business will continue to be the engine of our sales growth,” Buck told analysts. “Our online business has been very successful in supporting our TV business, while also extending our retail reach to aggressively market to e-commerce buyers, expanding into certain products, and in engaging site features.”
He adds: “More and more of our TV customers are opting to order online. The cost to order capture is very low when compared to the phone. Our customers are able to browse our entire selection and frequently buy incremental items to purchase from their favorite designer.”
Overall the web accounted for 28% of all sales in the third quarter vs. 29% in the prior year.