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Couture designers find home shopping networks HSN, QVC profitable outlets

Better known for beauty products, gaudy jewelry and gushing hosts, the big TV shopping networks are finally earning fashion credibility.

HSN and QVC have been on a signing binge for couture designers who made a name dressing celebs for red carpet events. They are churning out ready-to-wear lines with a designer cachet for a mainstream home shopping audience.

Isaac Mizrahi created a line for QVC and oversees the network's new Liz Claiborne collection. Naeem Khan, who dressed Michelle Obama for her first state dinner, sold out a line of shimmering evening dresses on HSN in just 10 minutes. After selling handbags at $79 to $1,600 on HSN, designer Carlos Falchi sold 30,000 pieces of his first attempt at apparel over a weekend of live appearances.

"A few years ago designers would never go on TV shopping networks, but now it's the place to be," said Marc Bouwer, who has outfitted Beyonce, Mariah Carey and Oprah Winfrey but also developed a $100-or-less sportswear line for QVC. "It's not just the economy. These days it's fashionable to mix it up rather than wear all designer clothes. Designers must be in more price ranges."

He confesses to feeling "like being in Oz" during his first TV appearance.

"I have sold products for years," he said. "But on TV you talk to millions fitted with an earpiece that puts the voice of QVC right in your head."

The trend picks up steam this year. QVC this week is airing the debut of its spring lines direct from the tents at Fashion Week in New York's Bryant Park. HSN apparel and accessories sales jumped 11 percent in the most recent quarter thanks to new designer lines, while the overall apparel industry continued to languish in a sales decline. And St. Petersburg-based HSN promises a broader selection and up to a dozen more new designer lines in 2010, right on the heels of a big sales lift from a new line launched in November by the high-profile couture team of Mark Badgley and James Mischka.

"What you saw from Badgley Mischka in November was just a tease of their full launch in March," said Lynne Ronon, a former Burberry Asia president who is executive vice president of merchandise at HSN. "What's changed is designers discovered our customers are fashion savvy."

QVC, which years ago used Hollywood designers Bob Mackie and Stan Herman, has a huge head start. The West Chester, Pa., network gets a third of its business selling apparel and accessories. But Mindy Grossman, a fashion industry veteran who took charge of HSN in 2006, wants to push the network's apparel, accessories and footwear business from a low of 10 percent last spring to 15 percent soon.

HSN took baby steps at first when partnerships with fashion magazines Elle and Lucky and Stefani Greenfield of Scoop Management put lines from lesser-known but rising designer names on the air in 2008 and 2009. They sold well enough that word spread to bigger names. They realized glitz and glamor may lie in lending clothes to celebrities and paying them to appear at their runway shows, but the money is in a broader audience.

"There are far fewer stores to carry designer goods today, and the TV shopping networks have stepped up to sell in a more upscale lifestyle atmosphere including an online environment," said Kelly Tackett, a senior analyst with Kantar Retail. "Personally, I have been surprised how much people are willing to spend for fashion on TV."

Several fashion blogs and New York garment industry writers have been impressed by the shift in what they once regarded as the land of fake diamonds. The Los Angeles Times even declared the designer rush to TV shopping one of seven fashion trends to watch this year.

"What once was a dumping ground for celebrity jewelry is a destination for legitimate designers," wrote Amy Odell, a fashion writer for New York magazine.

"It has gotten easier to get designers to work with us," said Doug Howe, top merchant at QVC. "Going forward, designers will become a more critical part of our strategy."

While a sour economy seems a strange time to go after designers, other forces came into play.

"It's a combination of what the economy did to the luxury fashion business by putting the aspirational shopper on the sideline, and the designers seeing rivals run up astounding sales in a few hours on TV," said David Wolfe, creative director of Doneger Group, a fashion trend firm.

"HSN pulled it off without losing their core customers," said Nancy Hull, a securities analyst with Ladenburg Thalman, who has a buy recommendation on HSN's stock, which almost doubled since Labor Day.

The transition took time. The networks spent years shedding a bargain-basement image by adding dozens of familiar brand-name products and credible faces to their home design and cookware businesses. While D-list celebrities are still common on the air, networks insist they bring expertise to product pitches as broadcasters ease out suppliers engaged in what's called "rent a celebrity."

The success of designers such a Mizrahi and Karl Lagerfeld working up inexpensive lines for discounters ranging from Target to H&M lowered resistance.

"We made it clear we honor the integrity of the brand image the designers work so hard to create," Ronon said.

That can mean slick image ads in up to 3 million mailed network program guides. For Sean "P. Diddy" Combs, whose Sean John fashion empire has annual sales of about $300 million, HSN built an entire set for the launch of his fragrance line. The network staged a cocktail party for the fashion press at Naeem Khan's Manhattan showroom when he unveiled his HSN line just after he won kudos dressing the president's wife.

Because HSN has TV production studios and models readily available for video, the network can provide designers a state-of-the-art Web presence at hsn.com at a fraction of the cost of other online merchants. It also offers its own fashion news blog, chat groups and streaming video complete with filmed models instead of static photos or animation. Click a button and the model turns around to show the back of a garment.

From the designers' perspective, there's another incentive. In TV shopping, designers hear directly from their customers, access department store buying staffs rarely offer.

"The chance to get feedback — love or hate mail — directly from your customer is a huge plus. It is interactive and that is the future," said Falchi, the handbag designer who runs a $100 million business but still gets some pushback from luxury stores that sell his ostrich and snakeskin products. "But when I appear on HSN, sales of our handbags rise in brick-and-mortar stores, too."

Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

Home shopping fashion

It used to be rare to see a high-end designer pitching product on a TV shopping network like St. Petersburg-based HSN. Not anymore.

10 Minutes it took designer Naeem Khan's evening dresses to sell out on HSN

30,000 Pieces of apparel designer Carlos Flachi sold over his first weekend of live appearances on HSN

$1,600 Amount some Falchi handbags previously sold for on HSN

15 Percent of revenue HSN wants to derive from selling apparel and accessories, up from 10 percent last spring

36 Percent of revenue competitor QVC already gets from selling apparel and accessories

Source: Kantar Retail, HSN, QVC

.by the numbers

HSN's business breakdown*

52 percent — Home, electronics and hard goods

17 percent — Jewelry

21 percent — Health and Beauty

10 percent — Fashion (apparel and accessories)

*Second quarter 2009

Source: Ladenburg Thalman & Co.

Couture designers find home shopping networks HSN, QVC profitable outlets 02/12/10 [Last modified: Thursday, February 18, 2010 11:36am]

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