E.W. Scripps eyes alternatives for Shop At Home Network
The E.W. Scripps Co. is exploring strategic alternatives for TV and web retailer Shop At Home Network after the business unit posted a net loss of $28 million in 2005, including a net loss of $10.4 million in the fourth quarter.
In its latest earnings release, Scripps says it is “in the process of exploring strategic alternatives for Shop At Home.” The company is looking at various options for Shop At Home Network and hasn’t excluded a possible sale. “We are looking at all of our options,” a spokesman says.
For 2005, Shop At Home Network, No. 212 in the Internet Retailer Top 400 Guide to Retail Web Sites, posted revenues of $359 million, up 23% from revenues of $293 million in 2004. But in 2005, Shop At Home Network also posted a net loss of $28 million compared with a net loss $22 million in 2004.
“Despite our best efforts, we haven’t been able to secure consistently strong channel positions on cable systems across the country, which has hindered retail sales and profitability at Shop At Home,” says Scripps president and CEO Kenneth W. Lowe. “While Internet sales are growing at a rapid pace, product sales generated by our television broadcasts have lagged because of the challenges we’ve had gaining affordable access to permanent, high-quality cable distribution for the network. Those factors, among others, prompted us to write down our investment during the fourth quarter and undertake a deliberate and careful assessment of strategic alternatives for Shop At Home. Our intention going forward is to maximize the value of Shop At Home for the benefit of our shareholders.”
In the fourth quarter, Shop At Home Network posted revenues of $90.9 million, up 1.7% from revenues of $89.3 million for Q4 2004. For the fourth quarter, the net loss was $10.4 million vs. a net loss of $8.0 million in the same period a year ago.
To expedite sales at Shop At Home Network, Scripps is growing its e-commerce base by consolidating more web shopping activity at ShopAtHomeTV.com, beginning with the online stores for three of the company’s most widely watched cable channels. Under that plan, all online sales for TV programs the Food Network, Home and Garden Television and DIY Network will take place on the ShopAtHomeTV.com platform.
Shop At Home Network senior vice president of interactive commerce Adam Rockmore will speak at the Internet Retailer 2006 Conference & Exhibition in a session titled When TV and the Internet Merge, Web Shopping Explodes.
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