QVC’s parent company looks for ‘new generations of customers,’ CEO says amid falling sales
The company saw its total revenue decline 4 percent to $3.1 billion in the second quarter of this year.
Despite a tough quarter, QVC’s parent company continues trying to attract “new generations of customers,” with investments in platforms beyond television along with unique products and storytelling, Qurate Retail Group CEO Michael George told analysts on a Thursday conference call.
The company has said its core customer base is women between the ages of 35 and 64. And George touted certain improvements to analysts, such as a digital first launch of an exclusive fashion collection with QVC that attracted 80 percent of its new customers from the 25- to 44-year-old demographic.
Still, Qurate struggled in the second quarter of this year, or the three months ending June 30, as the company’s total revenues fell 4 percent to $3.1 billion.
Qurate Retail Group acquired QVC’s main rival, St. Petersburg, Fla.,-based Home Shopping Network in 2017, and is looking for ways to bring the two together. Revenues from QVC and HSN, which the company calls QxH, fell 1 percent to $19 billion. QVC International revenue decreased 2 percent to $640 million.
The company bought Seattle-based Zulily in 2015 to reach younger women, but the unit recently laid off an undisclosed number of employees amid announcements of an internal restructuring. Zulily’s revenue plummeted 13 percent to $363 million in the quarter, the company reported.
“I think it’s still a little bit unclear what really drove the deterioration over the last, I would say, two or three quarters in the Zulily business,” Oliver Wintermantel, an analyst with Evercore ISI, said on the call, while asking the management how they plan to fix it.
George replied that the company needs to find “more effective forms of marketing” beyond Facebook and must improve the customer experience with “freshness” of products and the website.
E-commerce revenue represented more than 55 percent of combined QVC and HSN sales, showing executives that the Qurate customer is coming to the brand across channels. George said they are rebuilding the digital options “to be more mobile-friendly,” including launching a new checkout platform.
“We can present her a lot of great video content on the go,” he told analysts, referring to the company’s typical customer. “When she’s standing in the Starbucks line,” he said, the customer can watch live programming.
At the same time, QVC2 and QVC3 channels saw eight million additional homes and HSN reached 19 million more home as of June 30, George said.
“While TV viewership doesn’t correlate directly with sales, we do see it as a positive indicator of overall engagement with our brands, especially at a time when TV viewership more broadly is declining," George said.
Shares of Qurate Retail rose $0.48 or 3.57% on Thursday to close at $13.64.