After mounting losses and a home shopping channel that couldn’t gain enough critical mass on national cable TV systems, E.W. Scripps Co. is closing down TV and web retailer Shop At Home Network.
Broadcasts of Shop At Home television programming and operation of the network's e-commerce site - ShopAtHomeTV.com - will be discontinued on June 22. Shop At Home, No. 133 in the Internet Retailer Top 500 Guide to Retail Web Sites, will remain in business through June 30 to allow time for the delivery of retail products purchased by consumers during the final days of broadcast and online sales, Scripps says. "This is not the outcome we had hoped for when we acquired Shop At Home nearly four years ago," says Scripps president and CEO Kenneth W. Lowe. "Shop At Home was unable to surmount some fundamental weaknesses that have blocked its path to profitability.”
Scripps will record an after-tax loss in the second quarter of up to $60 million, reflecting operating results, cash expenses related to closing the business and a partial write-down in the value of Shop At Home's assets.
In the first quarter, the Scripps board of directors pursued a sale of Shop At Home. As a result, Shop At Home's first quarter financial results were classified under discontinued operations as required under generally accepted accounting principles, Scripps says.
Scripps acquired Shop At Home in two transactions with a total value of about $285 million. The company acquired controlling interest of the television network in October 2002 and in April 2004 acquired the remaining minority interest and five Shop At Home-affiliated broadcast television stations. Shop At Home, which was not profitable when it was acquired by Scripps, has incurred $84 million in losses over the four-year period, Scripps says.
Shop At Home Network had e-commerce revenue of $57.1 million in 2005, up 30% from Internet Retailer estimated sales of $44 million in 2004.
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