Catalog Unit a Drag on HSN in 4Q
March 8, 2009,
HSN Inc. last week reported a fourth-quarter loss of $2.15 billion compared to a profit of $73.1 million in the year-earlier period, largely due to $2.2 billion in after-tax asset impairment charges including the writedown of goodwill associated with its Cornerstone unit.
Sales in the Cornerstone catalog/internet segment tumbled 25% to $232.6 million for the quarter, primarily due to diminished consumer demand for home furnishings and apparel. Units shipped fell 21% and average price point slipped 3% to $67.00.
Cornerstone nameplates include Ballard Designs, Garnet Hill, Frontgate, Grandin Road, Improvements, Smith + Noble, The Territory Ahead and TravelSmith.
Consolidated company sales fell 11% to $778.5 million.
To cut costs during the quarter, the company eliminated 250 positions, renegotiated print, paper and freight contract, and made sweeping reductions in travel expenses, outside fees and other costs.
"As an organization, our key priorities, particularly in this environment, are to retain and build out active customer vase and to continue to gain market share from those less strong and fluid," said Mindy Grossman, ceo.
For the year, HSN Inc. reported a loss of $2.4 billion. Consolidated sales of $2.8 billion fell 3% from the prior year.
The HSN division increased annual sales by 3% to $1.96 billion while Cornerstone sales fell 15% to $867 million.
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