Monday, October 15, 2018
Business

HSN's Mindy Grossman a hot commodity among retailers

These days, retail big shot Mindy Grossman is hotter than any skinny jean, perfume or kitchen appliance sold on HSN.

Last week, the Wall Street Journal reported the CEO of HSN Inc. was in negotiations with J.C. Penney Co. to become its CEO but turned it down. Before that, she was rumored to be a top candidate for Target's CEO job. Two years ago, Avon came knocking.

Even if the talk is just talk, it's clear that Grossman could get a new job whenever she wants.

"She's certainly on fire," said Bob Phibbs, a retail consultant, author and speaker known as the Retail Doctor. "She's on a lot of people's short lists. She can pick and choose, although I haven't seen that she wants to leave."

Since taking the helm of the St. Petersburg-based retailer in 2006, Grossman has been credited with boosting the company's frumpy image and transforming it into an innovative retail powerhouse. She dived into mobile technology long before other retailers and spearheaded ways to engage and entertain customers through special TV programming, live concerts and online games. She counts among her BFFs top celebrities who come on HSN to pitch their wares, from Mary J. Blige to Nicki Minaj, who this month sold $1.4 million worth of her new fragrance in one day.

But would Grossman jump ship for another retailer like J.C. Penney or Target, which are struggling?

Some retail analysts say no. Despite having worked for Nike and Ralph Lauren, she doesn't oversee major brick-and-mortar stores at HSN Inc., which includes HSN, its Cornerstone brands of home and lifestyle products, and a few outlet stores in Florida. It would be a tough sell to persuade her to leave a company that's doing well for one that's flailing, especially in these tough retail times.

Ultimately, the task could be too daunting, even for someone who likes a good challenge.

"It's not a steep ladder. It's overwhelming," Phibbs said. "It's not an easy fix."

From a branding perspective, Grossman, 56, might not be the right fit. She is viewed as an upscale woman representing an upscale brand, as compared to more working-class J.C. Penney. She wears designer clothes from HSN's collections. She loves her stilettos.

Fixing J.C. Penney, and to a lesser degree, Target, is going to take time for anyone who assumes the top spot. Plans and merchandise orders for the holiday season are already in place, and any new CEO would have to wait until next year to make significant changes.

Most likely, taking the reins would not be painless. The new CEO might be forced to close stores or deliver bad news to employees and investors, said retail analyst Brian Sozzi, CEO of Belus Capital Advisors. Stabilizing and rebuilding business will trump efforts to innovate and experiment, Grossman's forte.

"J.C. Penney won't be disrupting the stodgy department store sector any time soon,'' wrote Sozzi for TheStreet.com. "J.C. Penney's low- to middle-income shopper … wants discounts on merchandise season after season, not a new shopping experience that may bring with it higher ticket prices.''

Although both are publicly traded, J.C. Penney and HSN are different animals. J.C. Penney operates 1,100 stores and posted $2.8 billion in sales in the first quarter. HSN sells merchandise on TV, online and through catalogs, and it had $777.4 million in sales last quarter. Whereas HSN's business has gradually grown, J.C. Penney lost $1 billion in 2012 and had a 25 percent sales decline. Under ousted CEO Ron Johnson, its stock dropped 50 percent.

Paula Rosenblum, managing partner at Retail Systems Research, said she was surprised Grossman's name came up as a successor to Mike Ullman, who rejoined J.C. Penney on an interim basis last year after Johnson was fired. The fact that J.C. Penney would consider someone without much department store experience shows that finding a CEO is difficult. Other retailers are similarly on the hunt for a top executive, including American Eagle Outfitters, Bebe stores and American Apparel.

"The bottom line is they don't have a lot of choices, and that's really a problem," Rosenblum said.

She suspects that talks with Grossman ended because J.C. Penney "couldn't give her a compelling reason" to take the job. Most likely, it would have involved moving to Dallas, something she probably didn't want to do.

"I don't know if the odds of success are strong enough," she said, noting that a second-in-command official from more successful Macy's or Kohl's might be a better match. "If you have a decent work-life balance, why would you go?"

More money might not be enough to woo her. Grossman, who has not commented on a possible move, earned $13.8 million last year, making her the highest-paid CEO of any public company in the Tampa Bay area. Through charity and other work, she is well-entrenched and well-respected in the community. She sits on the boards of the National Retail Federation, UNICEF and Tampa-based Bloomin' Brands, run by Tampa Bay's other top female executive, Liz Smith. Last year, Forbes magazine named her one of the world's 100 most powerful women for the third time.

Still, Grossman has been known to make bold moves. People scratched their heads when she left Nike for HSN, which at the time was IAC, HSN Inc.'s former parent company.

"When I joined the company, everybody said, 'What are you doing?' They thought I had lost my mind when I left Nike" Grossman told Elle magazine in 2012. "They thought I'd go run the Gap, something in that genre." Most people weren't familiar with the Home Shopping Network, she said, "and if they were, they felt it was kind of declasse"

Phibbs cautioned that even if she's not eager to leave HSN, she seems at least willing to talk to other retailers. He wouldn't rule anything out for her.

Eight years is a long time for a retail CEO — even one who likes her job.

Contact Susan Thurston at [email protected] or (813) 225-3110. Follow @susan_thurston.

 
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