As it posted declining results in the first quarter, Evine emphasized executive changes and initiatives designed to turn around the business.
For the first quarter ended May 4, Evine posted a net loss of $21 million, or 31 cents per share, versus a net loss of $3 million, or five cents per share, in the year-before period. Net sales were down 16% in the first quarter to $131.5 million year over year. Operating loss was $20.2 million versus an operating loss of $1.9 million in the period a year before.
Tim Peterman, who returned to the CEO role on May 1, said, “Although we have only been working as a team again for less than a month, we have already identified the primary causes for Evine’s dramatic financial declines these last few quarters and begun to implement focused remediation actions. In terms of our first quarter, 2019 performance, there is no other way to say it: Our performance was poor. In fact, our performance over the past three quarters has significantly missed expectations, and we must perform better for our shareholders and employees. Our plan to reverse our recent negative financial trend is clear, exciting and already in motion.”
Over the 20 days, Peterman noted, Evine has hired Jean Sabatier, a former QVC executive and past svp/sales and product planning, and programming for Evine, placing her into a new role, evp/chief commerce officer. The company has also optimized the current merchandising mix to drive better customer engagement and improve merchandising and shipping margin, a move that will create an increase of 5% to 7% in the airtime mix of Evine’s strongest categories, jewelry, beauty, wellness and watches, and a corresponding decrease in the airtime mix of the company’s lowest performing categories, home and fashion.
Peterman went on to say that Evine wants to establish “a passionate, entrepreneurial culture with a lean, nimble organization” as a key part of the go-forward strategy. The company already has completed a cost cutting move that it expects will eliminate about $15 million in annual overhead costs. The move included a 20% reduction in its workforce and the elimination of 11 senior executive roles including vp/gmm home.
“In the second quarter, we are planning to change the name of the Evine network back to ShopHQ, which was the name of the network in 2014,” Peterman said. “ShopHQ is easier to recognize for existing television retailing customers, who spend over $9 billion annually with television retailers in U.S. We believe this more intuitive and recognizable name will allow us to better promote our network and build our customer file again. Our conclusion from the review of the customer impact data related to the change to Evine in 2015, was that it was not positive. We view these immediate tactical actions as critical to address our near-term challenge in the second quarter and thoughtfully improve and grow again in the third and fourth quarters.”
Beyond addressing immediate considerations, Peterman said Evine had developed a new interactive media growth strategy that centers on demonstrating that the company no longer is a digital retailer that happens to be on television.
“Instead, we are an interactive media company that happens to have multiple monetization models: TV retailing, e-commerce, advertising and service fees,” he said.
The company plans to boost its service fee operation, Peterman said, expanding Evine’s existing 3PL service offering, and to expand its advertising and e-commerce business including with the rebranding of the company’s existing Evine Too channel into a new omnichannel television shopping brand dubbed Shop Bulldog. The new brand will sell and advertise men’s merchandise and services. In the same vein, Evine plans to launch a new omnichannel Spanish language television shopping brand centered on the Latin culture to sell and advertise goods, services and personalities, celebrating aspirational lifestyles.