Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
TV and online shopping network ShopNBC has reduced its salaried work force by 11%, bringing total reductions since fiscal 2007 to 27%.
In its continuing effort to stem losses, ShopNBC has cut its salaried work force by 11%, or about 60 workers, bringing total headcount reductions since fiscal 2007 to 27%. ShopNBC and its e-commerce business ShopNBC.com are operated by ValueVision Media Inc.
Employees affected by the layoff were offered severance and outplacement services, the company says. In addition, ShopNBC will suspend its 401(k) match for fiscal 2009, and there will be a salary freeze with no merit pay increases. In addition to trimming staff, other cost-reduction measures for the coming fiscal year include an organizational restructuring and renegotiating its cable and satellite distribution agreements.
The moves were designed to bring greater focus on profitability, accountability and efficiency in key business units, the company says. “The steps taken to resize our organization for 2009 are difficult but necessary,” says Keith Stewart, president and chief operating officer of ShopNBC, No. 65 in the Internet Retailer Top 500 Guide. “Going forward, we will continue to aggressively explore and implement all appropriate cost-reduction measures. By reducing our cost structure today, we will be able to focus on our long-term objectives of better serving our loyal customers and achieving profitable growth.”
The company also reported it is making progress on the renewal of its cable and satellite distribution agreements. To date, it has renegotiated agreements covering 18 million homes and achieved competitive rates for these homes. The company remains in negotiations with cable operators that represent the majority of the households currently up for renewal and expects to provide a status update before the end of January.
“We are pleased with how our negotiations are proceeding,” Stewart says. "To date, we have been successful in preserving our distribution footprint, which is important for our future growth as these homes are like our stores.”
In the third quarter ended Nov. 1, 2008, revenue at parent ValueVision declined by 32.5% while the company’s net loss grew by 258%. For the quarter, ValueVision posted a net loss of $20.8 million on sales of $124.8 million, compared with a net loss of $5.8 million on sales of $184.8 million in Q3 of 2007.
For the first nine months of fiscal 2008, ValueVision posted a net loss of $54.2 million on revenue of $422.9 million vs. net income of $23 million on sales of $563.5 million in the previous year. ValueVision did not break out Q3 and year-to-date web sales.