Make us your home page
Instagram

HSN reports $2.9 billion fourth-quarter loss

The recession hit HSN Inc. full force, stalling the e-commerce company's turnaround.

The St. Petersburg parent of the nation's second-biggest TV shopping channel reported an 11 percent drop in sales for the quarter that included the Christmas holidays and a $2.9 billion loss as it wrote off goodwill carried on its books since going public last summer.

HSN's sales performance for the quarter that ended Dec. 31 was dragged down by a 25 percent sales collapse at its Cornerstone collection of mail order catalogs. Sales at the TV shopping network were down 4 percent, a bit worse than the rest of the broad, depressed general merchandise retail industry, but better than department stores. The company's dot-com business was up 4 percent, which is better than the online retail industry did during the holidays, and had grown to 28 percent of the company.

HSN shares have been all over the board since the IAC/InterActiveCorp set it off at $10 a share just before the fall stock market meltdown. Shares have traded as low as $1.61 and as high as $15, but after the writedown Tuesday were trading at $3.79, down 6 cents.

Despite the huge paper loss, HSN ended the quarter with $177 million in cash, remained in compliance with its debt restrictions and expressed confidence it can manage its way through the recession.

"We continue to believe that our unique business model at HSN and the changes that we are implementing at Cornerstone will enable us to weather the storm and in fact allow us to gain (market) share" from TV shopping rivals that all reported worse results for the holidays, said Mindy Grossman, HSN chief executive.

The company's market capitalization — what the stock market thought the company was worth — before Tuesday's earnings release was a scant $220 million, less than a tenth of what the network's book value was at the time it was spun off on its own last August.

In today's volatile stock market, many companies are facing similar massive writedowns to square their books with market reality.

Officials said the noncash writedown will not make it an easier target for acquisition by the likes of rival Liberty Media, which owns all of QVC and 30 percent of HSN, to buy the rest of the No. 2 TV shopping network. Liberty executives recently said they figured they would buy controlling interest in HSN "eventually." In HSN's breakaway agreement from IAC, Liberty agreed not to bid for controlling interest in HSN until at least May 2010.

For the full year, HSN reported losing $3.1 billion, vs. a net income of $170 million in 2007. Sales slipped 3 percent to $2.8 billion, down from $2.9 billion.

The company recently cut payroll by 250 jobs, reduced 401(k) matching contributions and froze pay. Cornerstone's management also has been overhauled.

HSN also announced hiring Brian Bradley, who previously headed the dot-com, call center and catalog operation at Circuit City Stores Inc., as executive vice president of HSN.com and Advanced Services.

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

Other earnings reports

Tech Data Corp.: The Clearwater IT distributor overcame a 12 percent drop in sales as cost cutting helped fuel a 17 percent increase in net income for the fourth quarter, which was helped by a tax benefit and the disposal of some subsidiaries. But even without those adjustments, profits were still up 4 percent. Its quarterly net income of $58.6 million, or $1.17 a share, compared with net income of $50.2 million, or 92 cents a share, a year ago. Net sales fell to $5.7 billion, compared with $6.5 billion in the year-ago period.

Sykes Enterprises: The Tampa call center company's fourth-quarter profit fell 19 percent due to higher taxes and a negative German tax court ruling. Net income declined to $7.6 million, or 19 cents per share, from $9.5 million, or 23 cents per share, a year ago. For the full year, profit increased 52 percent to $60.6 million, or $1.48 per share, from $39.9 million, or 98 cents per share, a year earlier. Revenue grew to $819.2 million from $710.1 million.

HSN reports $2.9 billion fourth-quarter loss 03/03/09 [Last modified: Wednesday, March 4, 2009 9:56am]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Last steel beam marks construction milestone for Tom and Mary James' museum

    Growth

    ST. PETERSBURG — Tom and Mary James on Wednesday signed their names to the last steel beam framing the 105-ton stone mesa that will be built at the entrance of the museum that bears their name: the James Museum of Western and Wildlife Art.

    The topping-out ceremony of the James Museum of Western & Wildlife Art was held Wednesday morning in downtown St. Petersburg. Mary James (from left), husband Tom and Mayor Rick Kriseman signed the final beam before it was put into place. When finished, the $55 million museum at 100 Central Ave. will hold up to 500 pieces of the couple's 3,000-piece art collection. [Courtesy of James Museum of Western & Wildlife Art]
  2. Heights Public Market to host two Tampa Bay food trucks

    Business

    TAMPA — The Heights Public Market announced the first two food trucks for its "rotating stall," which will feature new restaurants every four months. Surf and Turf and Empamamas will be rolled out first.

    Heights Public Market is opening this summer inside the Tampa Armature Works building.
[SKIP O'ROURKE   |   Times file photo]

  3. Author Randy Wayne White could open St. Pete's biggest restaurant on the pier

    Food & Dining

    ST. PETERSBURG — The story begins with Yucatan shrimp.

    St. Petersburg Deputy Mayor Kanika Tomalin, pilot Mark Futch, Boca Grande, St. Petersburg Mayor Rick Kriseman, and author and businessman Randy Wayne White,  Sanibel, exit a Maule Super Rocket seaplane after taking a fight around Tampa Bay off the St. Petersburg waterfront, 6/28/17.  White and his business partners are in negotiations with the City of St. Petersburg to build a fourth Doc Ford's Rum Bar & Grille on the approach to the St. Petersburg Pier with a second event space on the pier according to White. The group met near Spa Beach after a ground breaking ceremony for the new pier. "We want to have our business open by the time the pier opens," said White. Other Dr. Ford restaurants are located on Sanibel, Captiva and Ft. Myers Beach. SCOTT KEELER   |   Times
  4. Guilty plea for WellCare Health Plans former counsel Thaddeus Bereday

    Business

    Former WellCare Health Plans general counsel Thaddeus M.S. Bereday pleaded guilty to one count of making a false statement to the Florida Medicaid program, and faces a maximum penalty of five years in federal prison. A sentencing date has not yet been set, acting U.S. Attorney W. Stephen Muldrow of the Middle District …

    WellCare Health Plans former general counsel Thaddeus M.S. Bereday, pleaded guilty to one count of making a false statement to the Florida Medicaid program, and faces a maximum penalty of five years in federal prison. A sentencing date has not yet been set, acting U.S. Attorney W. Stephen Muldrow of the Middle District of Florida stated Wednesday. [LinkedIn handout]
  5. DOT shows alternatives to former Tampa Bay Express toll lanes

    Transportation

    TAMPA — State transportation officials are evaluating at least a half-dozen alternatives to the controversial Tampa Bay interstate plan that they will workshop with the community over the next 18 months.

    Florida Department of Transportation consultant Brad Flom explains potential alternatives to adding toll lanes to Interstate 275 during a meeting Wednesday at DOT's Tampa office. Flom presented seven diagrams, all of which swapped toll lanes for transit, such as light rail or express bus, in the I-275 corridor from downtown Tampa to Bearss Ave. [CAITLIN JOHNSTON | Times]