Competition, Price Tuned QVC into HSN Buyout

An increasing threat of competition and a dropping Home Shopping Network stock price tuned QVC into its recent $2.1 billion deal. Image via QVC.

QVC has flipped through many channels of potential growth in recent years.

However, it didn’t tune into a Home Shopping Network buyout until online and mobile competition cast a more noticeable glare on its business model and HSN’s stock price dropped within striking distance — from $38.20 to $31.95 in recent months, according to a Philadelphia Business Journal report by Jeff Blumenthal.

“We believe QVC and HSN came to the conclusion that the two companies were stronger together to tackle the unique challenges of retail in 2017, including finding ways to both effectively compete against and leverage Amazon,” said Maxim Group analyst Tom Forte.

“In many ways, we see QVC as creating a powerful combination of retailers able to compete against Amazon for the long term, including QVC, HSN, and Zulily (which it bought in 2015).”

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Only 2 million of QVC’s 8 million customers also shop at HSN, which has 5 million customers total and specializes in fashion and beauty, whereas QVC is known for electronics, fitness, and health.

Combining customers, streamlining technology, leveraging greater buying power, and cutting out duplication should propel West Chester’s expanded QVC to “$7.5 billion in online sales and $4.7 billion in mobile sales — making it the third-largest U.S. e-commerce company behind only and Walmart.”

“You will see revenue growth later this year,” Forte said, “and I think this is the start of the emergence of QVC 2.0.”

Read more about the factors behind QVC’s acquisition of HSN in the Philadelphia Business Journal here, and check out previous VISTA Today coverage of the West Chester company here.

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