Web sales rise 28% in Q1 for ValueVision’s ShopNBC.com
Web sales at ValueVision Media Inc. rose 28% in the first quarter while total net sales grew by only five percent.
As a result of lower sales, ValueVision, which operates ShopNBC.com and is No. 64 in the Internet Retailer Top 500 Guide, is restructuring its operations. The TV and web retailer is cutting about 12% of its staff, consolidating two distribution operations into a single warehouse facility and closing two outlet stores.
The job cuts and other consolidation will save ValueVision about $10 million over time, though the company will incur restructuring charges of $2 million to $3 million during the 2007 fiscal year.
"In light of our first quarter results, we have taken decisive steps to improve the financial performance of our company and maximize long-term shareholder value," says CEO William Lansing. "We are restructuring our business operations to improve profitability.”
In the first quarter, ValueVision posted web sales of approximately $51.6 million, compared with web sales of about $40.3 million in Q1 2006. Also for Q1 ValueVision posted net income of $34.4 million on revenue of $188.1 million vs. a net loss of $2.1 million on revenue of $178.7 million in the prior year. First quarter revenue also includes a gain on the sale of ValueVision`s 12.5% equity stake in Polo.com for $40.2 million to Ralph Lauren.
"Sales through our ShopNBC.com web site increased 28% in the first quarter and now represent 28% of total merchandise sales,” says Lansing. “Continued growth in our search and affiliate programs drove these results."
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