ValueVision Media
Encyclopedia
ValueVision Media is a direct-to-consumer retailer with a television home shopping and Internet business. The company's television network is called ShopNBC
and is available in millions of homes in the United States. The company also broadcasts the ShopNBC network directly on the Internet at www.ShopNBC.tv, and it sells products at www.ShopNBC.com.
ValueVision Media is headquartered in Eden Prairie, Minnesota
. Customer service is in Brooklyn Center, Minnesota
as well as Spokane, Washington
and Omaha, Nebraska
. Fulfillment operations are in Bowling Green, Kentucky
. In addition to selling directly to consumers through ShopNBC
, the company provides customer service and fulfillment services to polo.com.
The Company was founded in 1990 by Robert Johander and several others. ValueVision got its big growth spurt under the leadership of Gene McCaffery, who was CEO from 1998 to 2003. Known as "the General," McCaffery is credited with persuading General Electric to take a large ownership stake in the Company. Under McCaffery, ValueVision also changed the name of the network from "ValueVision" to "ShopNBC." With NBC's help the network grew from 14 million homes to 58 million homes. McCaffery retired from ValueVision in 2003.
ValueVision CEO William Lansing guided the Company from 2004 to 2007, focusing on Internet growth. Lansing brought distribution costs down to 16% of revenue and is credited with swinging the Company from large EBITDA losses in 2004 to large EBITDA profits in 2006.The Company has not been profitable since.
ValueVision CEO Rene Aiu took over in early 2008. The company has trailed QVC
and HSN
home shopping networks and continues to have much higher distribution costs as a percentage of revenue than its two larger competitors. Aiu has made reducing distribution costs a priority. According to Stifel Nicolaus, On Aiu's watch, ValueVision distribution costs have climbed to more than 18% of revenue, compared to less than 8% for competitors. ValueVision suffers from a costly DIRECTV contract which expires in 2012. About 65% of ValueVision's cable network contracts expire in 2008, leaving uncertainty about ShopNBC's future. Some analysts think that a reduction in carriage fees may be possible, helping the Company. Other analysts think that the Company may lose distribution or face higher costs.
Aiu never had a chance to turn around the company and was unceremoniously fired after just a few months. She sued the company. Aiu was succeeded in the CEO position by Chairman John Buck, who later relinquished the post to Keith Stewart. Stewart has struggled to stabilize the home shopping network, which continues to shrink and post gargantuan losses.
The stock has fallen from a peak valuation of over $2 billion to less than $60 million in 2008 and less than $30 million in 2009. According to the 8-K filed with the SEC on 11/23/04, GE owns about 5 million preferred shares which have a preference of $8.29 per share, so it is not affected by additional share price declines. Common stock holders have asked ShopNBC to use its $85 million in cash to buy back stock and activist 13D shareholders have clamored for years for a stock buyback, but ValueVision may be precluded from large tenders by the contract with DIRECTV, which in essence makes a claim on the Company's cash through 2012.Cash has since fallen to about $50 million and continues to drop.
In 2009, Valuevision renegotiated the terms of its preferred with GE, giving the company more time before it runs out of cash. Throughout 2009, however, the Company has continued to hemorrhage. It now appears that the company is poised to go bankrupt in 2010.
ShopNBC
ShopNBC is an American broadcast and cable home shopping network, owned and operated by ValueVision Media, which is in turn 30% owned by GE Equity and NBC Universal...
and is available in millions of homes in the United States. The company also broadcasts the ShopNBC network directly on the Internet at www.ShopNBC.tv, and it sells products at www.ShopNBC.com.
ValueVision Media is headquartered in Eden Prairie, Minnesota
Eden Prairie, Minnesota
As of the census of 2000, there were 54,901 people, 20,457 households, and 14,579 families residing in the city. The population density was . There were 21,026 housing units at an average density of 649.2 per square mile...
. Customer service is in Brooklyn Center, Minnesota
Brooklyn Center, Minnesota
As of the census of 2010, there were 30,104 residents in Brooklyn Center. The racial makeup of the city was 49% White, 26% African American, 1% Native American, 14% Asian, 0.07% Pacific Islander, 5% from other races, and 4% from two or more races...
as well as Spokane, Washington
Spokane, Washington
Spokane is a city located in the Northwestern United States in the state of Washington. It is the largest city of Spokane County of which it is also the county seat, and the metropolitan center of the Inland Northwest region...
and Omaha, Nebraska
Omaha, Nebraska
Omaha is the largest city in the state of Nebraska, United States, and is the county seat of Douglas County. It is located in the Midwestern United States on the Missouri River, about 20 miles north of the mouth of the Platte River...
. Fulfillment operations are in Bowling Green, Kentucky
Bowling Green, Kentucky
Bowling Green is the third-most populous city in the state of Kentucky after Louisville and Lexington, with a population of 58,067 as of the 2010 Census. It is the county seat of Warren County and the principal city of the Bowling Green, Kentucky Metropolitan Statistical Area with an estimated 2009...
. In addition to selling directly to consumers through ShopNBC
ShopNBC
ShopNBC is an American broadcast and cable home shopping network, owned and operated by ValueVision Media, which is in turn 30% owned by GE Equity and NBC Universal...
, the company provides customer service and fulfillment services to polo.com.
The Company was founded in 1990 by Robert Johander and several others. ValueVision got its big growth spurt under the leadership of Gene McCaffery, who was CEO from 1998 to 2003. Known as "the General," McCaffery is credited with persuading General Electric to take a large ownership stake in the Company. Under McCaffery, ValueVision also changed the name of the network from "ValueVision" to "ShopNBC." With NBC's help the network grew from 14 million homes to 58 million homes. McCaffery retired from ValueVision in 2003.
ValueVision CEO William Lansing guided the Company from 2004 to 2007, focusing on Internet growth. Lansing brought distribution costs down to 16% of revenue and is credited with swinging the Company from large EBITDA losses in 2004 to large EBITDA profits in 2006.The Company has not been profitable since.
ValueVision CEO Rene Aiu took over in early 2008. The company has trailed QVC
QVC
QVC is a multinational corporation specializing in televised home shopping. Founded in 1986 by Joseph Segel in West Goshen Township, Pennsylvania, United States, QVC broadcasts in five countries as QVC US, QVC UK, QVC Germany, QVC Japan and – QVC Italy to 200 million households...
and HSN
Home Shopping Network
Home Shopping Network or HSN began in 1977 as a 24-hour/7 day a week home shopping television network televised via cable, satellite, and some terrestrial channels in the Philippines. HSN can also be shopped online at hsn.com...
home shopping networks and continues to have much higher distribution costs as a percentage of revenue than its two larger competitors. Aiu has made reducing distribution costs a priority. According to Stifel Nicolaus, On Aiu's watch, ValueVision distribution costs have climbed to more than 18% of revenue, compared to less than 8% for competitors. ValueVision suffers from a costly DIRECTV contract which expires in 2012. About 65% of ValueVision's cable network contracts expire in 2008, leaving uncertainty about ShopNBC's future. Some analysts think that a reduction in carriage fees may be possible, helping the Company. Other analysts think that the Company may lose distribution or face higher costs.
Aiu never had a chance to turn around the company and was unceremoniously fired after just a few months. She sued the company. Aiu was succeeded in the CEO position by Chairman John Buck, who later relinquished the post to Keith Stewart. Stewart has struggled to stabilize the home shopping network, which continues to shrink and post gargantuan losses.
The stock has fallen from a peak valuation of over $2 billion to less than $60 million in 2008 and less than $30 million in 2009. According to the 8-K filed with the SEC on 11/23/04, GE owns about 5 million preferred shares which have a preference of $8.29 per share, so it is not affected by additional share price declines. Common stock holders have asked ShopNBC to use its $85 million in cash to buy back stock and activist 13D shareholders have clamored for years for a stock buyback, but ValueVision may be precluded from large tenders by the contract with DIRECTV, which in essence makes a claim on the Company's cash through 2012.Cash has since fallen to about $50 million and continues to drop.
In 2009, Valuevision renegotiated the terms of its preferred with GE, giving the company more time before it runs out of cash. Throughout 2009, however, the Company has continued to hemorrhage. It now appears that the company is poised to go bankrupt in 2010.