If one were to play a word association game and throw the term “cable home shopping” into the mix, more likely than not the two most frequent responses would be “QVC” or “HSN,” the two leading players in the space.
Classifying them as two separate players is a bit outdated, though, since QVC’s parent firm, Liberty Interactive Corp, purchased the remainder of HSN’s parent, HSNi, in July of last year. Liberty had already owned 38 percent of HSNi prior to the purchase.
Until very recently, Evine — the bronze medalist in the home shopping 100-yard dash — barely registered on the radar of anyone watching the space, unless, of course, he happened to be an Evine Live shopper himself.
Described as the “Cinderella of home shopping,” Evine boasts a presence in 87 million homes across the U.S., in addition to a website and apps. The company reported revenues of $650 million last year, with a net income of $6.4 million. By comparison, QVC is in 101 million American homes and 374 million homes worldwide, and it brought in $2.8 billion in Q4 revenue. HSN nabbed $771 million.
But Evine is a profitable firm, and one that suddenly found itself caught up in a lot of interest a few weeks ago when rumors surfaced that Amazon was eyeing it for acquisition.
Neither Amazon nor Evine has commented on the rumor, though there is some evidence that the eCommerce giant has been quietly preparing for a home shopping arena purchase. It made a largely unreported acquisition of a firm called STARTEK earlier this year, and although it may sound like an acquisition more appropriate for Jeff Bezos’ Blue Origin space exploration firm, the business is a call center operator and engagement outsourcing specialist. Its areas of focus include cable TV, telecom and retail, and many analysts have said STARTEK is exactly the type of firm a player planning to go into cable home shopping might buy.
But, reading the tea leaves with Amazon is a fool’s game, in most contexts, and many have noted that the STARTEK acquisition could just as easily be connected to Amazon’s expansion into healthcare. Plus, Evine might be something of a difficult acquisition target. It has been a fairly dramatic piece of the retail landscape for the last few years — albeit a quiet one.
The big changes at the firm began in 2014, when activist shareholders took control of the board and installed new management. There was more executive turnover in 2016, which saw Bob Rosenblatt taking over as CEO. He was the chairman of Evine’s board at the time, and before that served as chief operating officer of Tommy Hilfiger and president of HSN.
Evine has been launching a flurry of new brands under Rosenblatt’s leadership, transitioning to HD and rebalancing the merchandise mix to focus on more profitable goods. He also made a clear effort to give the brand an update and something of a makeover. Evine Live wanted to make a bid for growth, and not just as the “other home shopping network.” In some senses, it wanted to be known as “the cool one,” or, at least the one with the most current look, style and approach to social media.
“We all see the opportunity with pop culture to use social media, whether it’s Facebook or Instagram, to drive customers here,” Rosenblatt said.
In late 2016, Evine also began the process of relocating away from its roots in Minnesota to more prime real estate locations in New York and Los Angeles.
“We want to be wherever the personalities are,” he added. “You have to make it convenient [for them].”
Those big-ticket real estate locations were financed by a $10 million investment from the likes of Tommy Hilfiger, Tommy Mottola and a handful of others who personally invested in the home shopping network.
The changes were in progress approximately a year later, but a rather large potential curveball showed up in late 2017. That curveball took the form of Marvin Segel, a veteran of the TV shopping industry, and Jim Morrison, co-founders of New York-based startup StarShop which works with Sprint. The two men were leading an investor group with hopes to purchase Evine Live — and really make some changes to its programming.
Segel noted in an interview with the Minneapolis Star Tribune that the television shopping model hadn’t changed much in 25-plus years. The industry was still relying on a “two shot” with a host and a guest, when the world of YouTube videos and viral content were showing that the younger viewing audience is not interested in it.
The two had hoped to make an investment in Evine, and gain a board seat to work with the company’s current management. When that overture was not successful, Segal and Morrison moved on to their buy plan. That buy never went through, though, because Evine’s board rebuffed the advances and its investors seemed uninterested.
“We just [couldn’t] leave it out there forever,” Segal told the Tribune. “We had to pull it back…All we ever got was a two-sentence response saying the company was not for sale.”
In fact, according to Morrison and Segal, Evine is not for sale to anyone.
“We do not know of any other interest in Evine,” Segal added, further noting Evine’s lackluster financial performance. “This is not the stock movement of a company being looked at.”
Its stock performance did pick up once the news of Amazon’s interest began circulating, however. There is no word or confirmation yet that a deal could be in the offing, but it is perhaps notable that on the same day the Amazon news was leaking, Evine Live announced it had found its sought-after New York and L.A. real estate.
The firm has secured a Los Angeles-based studio and business offices in the Wilshire-Beverly Hills area, as well as a New York City office located on 54th Street and 6th Avenue. Evine Live is aggressively expanding and, according to its own news release, looking to bring in new businesses, brand partners and talent.
“Bringing shopping and entertainment together has always been at the heart of who we are, and we are proud to say that we deliver a unique experience that Evine shoppers can’t find anywhere else,” Rosenblatt said. “Our strategic expansions into these opportunity-rich markets are part of our overall plan to drive innovation and differentiation within the business. Add to that the introduction of new technology that has enabled the consumer to shop from video, both on eCommerce and social media sites, making our video commerce content even more relevant and valuable.”