I don’t enjoy muddling through dense text filled with financial number, so here is the bullet point version of what ShopNBC reported for the 2010 First Quarter if you’re interested (if you're not, just meet me down at the first paragraph):
- Although ShopNBC managed to get their average price point per item down from $144 last year to $108, this is still nearly twice as much as QVC’s average selling price.
- Overall sales sank 6.6%, which ShopNBC primarily attributed to lower sales of electronics.
- ShopNBC increased their net shipped units by 23%, up from 877,000 to 1.1 million.
- E-commerce sales accounted for nearly 40% of all sales.
- New customers went up 48% and active customers were up 30% .
- ShopNBC had a net loss of $11 million, but this was down from last year's $15 million loss.
- Watches continue to be a strong category.
- Jewelry outperformed expectations, especially gold, diamond, gold-plated items, and colored gemstones.
So obviously the numbers aren’t looking good for ShopNBC, but what else is new? The real news from their first quarter results is the announcement that ShopNBC is being forced to change their name.
About ten years ago, a trademark licensing agreement was struck between NBC Universal and Value Vision (ShopNBC’s original name) that allowed Value Vision to use the NBC name and logo. However, the agreement expires next year and NBC Universal, which is being bought by Comcast, does not want to extend the agreement. This leaves ShopNBC without a name and without a logo.
On top of all that, NBC Universal also acquired over 6 million shares of ShopNBC in that licensing deal and they are currently making plans to sell all of it. TV retailing no longer fits in with their strategy. To make matters worse, another company under the same umbrella, GE Capital, owns another 6 millions shares of ShopNBC and they want to sell too. When the largest stakeholder in a company wants to sell, investors get a little nervous.
ShopNBC plans to gradually roll out the new, and as of now unknown, name on social media in the near future and then slowly incorporate the change to their website and finally on air by February. No name has been chosen yet, but there is a “short list.” Rumor has it that they will retain the “Shop” part of their name and tack on something new to the end. There are no plans to enter into another licensing agreement.
According to the Star Tribune, the roll out is intentionally slow:
[ShopNBC CEO Keith] Stewart said the company "learned from the past" after ValueVision burst onto the scene as ShopNBC in 2001.
"Customers puked all over the idea," Stewart said. "Sales were crimped for a few months. It's a long lesson we've learned many times over: Never take hard turns when dealing with the customer."So where does this leave ShopNBC? What’s going to happen to their stock price now that NBC is selling their stake? Will the new name and logo be the beginning of a whole new and successful brand, or just the beginning of the end?