Live from West Chester: John Malone's QVC, HSN, Zulily are now Qurate
The new name suggests the company's role in "curating" shopping experiences for smartphone, TV and laptop shoppers. But can it compete with Amazon?
Liberty Interactive Corp., including QVC and its many TV, mobile and digital shopping systems, is renaming itself Qurate Retail Group and moving its chief executive's base from Colorado to QVC Studio Park in West Chester.
Qurate, with $14 billion a year in sales, includes newly-acquired home-shopping channel HSN, its larger rival QVC, Seattle-based Zulily mobile and online retailing, and other shopping businesses assembled by billionaire media investor John Malone.
The stock fell 4.55 percent Thursday to $27.55 a share after the company reported modest sales growth for 2017. It's still up significantly from last February, when it traded below $19. QVC CEO Mike George has sought to convince investors that the company possesses the scale to boost sales through social media and other new platforms that are replacing traditional TV for many Americans.
George will now head the Qurate group as President and Chief Executive Officer from West Chester, the company said Thursday. He will replace Greg Maffei, who will serve as board chairman.
Despite the day's share decline, George said Qurate's 7 percent sales growth for 2017, not counting newly-acquired HSN, showed that the company can compete with online retail leader Amazon: Among large retailers, "not many guys are showing organic sales growth at that level," he told me, adding that QVC's China operations grew at more than double the company's overall rate.
The company is one of the largest private employers in Philadelphia's western suburbs, with more than 3,000 staff at the West Chester offices and studios. That's down from a peak of over 4,000 in the 2000s. QVC also operates a Lancaster County warehouse while Zulily runs a warehouse near Bethlehem.
The reorganization into Qurate combines a group of retail assets into a single stock that will be eligible for inclusion into the popular stock market indices, George added. He's hoping that will get Qurate listed in index funds managed by Vanguard Group and other big money managers, driving up the share price.
QVC says the federal tax cuts passed by Congress and signed by President Trump last year will cut its effective tax rate into the "low double digits," and that the company would "reinvest" the additional profits into "online marketing" and other business services.
Besides QVC, HSN and Zulily, Qurate Retail Group includes Ballard Designs, Frontgate, Garnet Hill, Grandin Road and Improvements retail brands, and says its videos are available to 370 million homes on 16 television networks in the Americas, Europe and Asia.
The new name suggests the company's role in "curating" shopping experiences for smartphone, TV and laptop shoppers "for our thousands of brand vendors," George said.
Qurate brings together former competitors HSN and QVC, which pioneered TV shopping, attracting buyers, mostly women, to watch recurring hosts peddle clothing, jewelry, electronics, household goods and food items.
Zulily applies a parallel format focused on smartphones and other mobile devices. Liberty Interactive bought Zulily in 2015, and agreed to buy HSN, with its Cornerstone "interactive lifestyle brands," last fall.
As Qurate Retail Group, the combined organization will serve 23 million customers worldwide and have 27,000 team members in the U.S., the U.K., Germany, Japan, Italy, France, Poland and China.
Traditional TV has lost audience, but George told investors that Qurate's total audience, including online, was up last year. Qurate has set up a New Ventures Team "focused on developing inventive retail concepts and looking beyond the organization's business for additional growth. Zulily cofounder Darrell Cavens heads New Ventures.
The new stock symbols QRTEA and QRTEAB will replace Liberty Interactive's former QVCA and QVCB tickers on the Nasdaq market.
(Updated 3:30 p.m. to include CEO comments)