ShopNBC narrows first-quarter loss, looks to expand merchandise mix
Home & Textiles Today Staff -- Home Textiles Today, May 20, 2009
Minneapolis -- ShopNBC narrowed its first-quarter loss to $12 million from $17.6 million a year ago. Gross margin slipped to 31.5% from 32.0% last year, but marked an improvement of 260 basis points over the previous quarter. Sales dropped 14% to $134 million owing to a 26% decrease in average selling price.
During this morning’s first-quarter conference call, Keith Stewart, president and ceo of ShopNBC, said he is confident that the company “is headed in the right direction.” The company has reduced its cost structure by 21% through a reduction in work force and other cost-saving measures, and “costs are well under control,” according to Stewart.
Going forward, the company plans to broaden its vendor base and determine new product categories. ShopNBC plans to increase inventory levels in the higher margin categories of home, fashion, beauty and jewelry. ShopNBC expects margins will improve throughout the year as the shift in merchandise mix occurs. Expanded airtime for more profitable categories is also planned.
In the first quarter, 94 new vendors were added across current and new product categories, and 62 new brands, collections and concepts were launched. There are plans for 90 launches for the second quarter.
The company also redesigned its website and launched the "ShopNBC Anywhere" mobile application during the quarter. The iPhone and iPod touch application is the first of its kind in the TV shopping industry.
“It’s a whole new ball game at ShopNBC,” said Stewart. He sees a “continued turnaround of [the] business.”