ValueVision Media, parent company of TV and Internet shopping network ShopNBC, reported a net operating loss of $10.5 million on sales that rose 20% over last year to $555 million for the year ended Jan. 31. Web sales rose 52% to $94 million. For the fourth quarter, the company reported net sales rose 16% to a record $158 million over last year, while Internet sales rose 30% over the year-ago quarter to a record $26 million.
Web sales accounted for approximately 17% of total sales at ShopNBC. In the past several months, the company has redesigned the site, improved customer service, expanded its online assortment to more than 10,000 items, and debuted a new online media center on the sites. The media center’s three-pane format offers online shoppers the choice of concurrently viewing live TV and web simulcasts, highlighted products currently on-air, and the opportunity to browse the rest of the site and purchase the product they are viewing on live stream without having to break away from the live stream to do so.
“If we at ShopNBC are selling apples, this technology is as close as you can get to allowing the customer to smell, taste and eat the merchandise through e-commerce," says Steven Craig, vice president of ShopNBC Interactive. In addition, a video on demand feature archives entire shows, show segments and product pitches allowing customers who missed a program to view it entirely or to extract specific segments or products, which are listed online.
While top line growth has been up since the shopping network launched in 1998, more than tripling its distribution into U.S. homes and nearly quadrupling revenue, what ValueVison CEO Gene McCaffrey termed “difficulties of the past year” cut into the bottom line. Beyond political and economic uncertainties of the past several months, these included difficulties with a companywide systems conversion that disrupted the company’s business between June and September of last year.
In addition, the company in the fourth quarter wrote down from $31 million its investment in its Ralph Lauren Media Venture with NBC and Polo Ralph Lauren, reflecting “significantly lowered expectations” of the venture, which operates Polo.com. The company will receive an $11 million cash payment from the venture in exchange for amending its existing customer service and fulfillment agreement with Ralph Lauren Media joint venture. ValueVision has also retained the right of first refusal to continue servicing Ralph Lauren Media after Dec. 31 of this year.
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