Qurate Retail Group, the parent company of HSN and QVC US, will combine the two retailers into a single business unit called QXH. The parent company seeks to improve long-term growth prospects and accelerate the retailers’ digital transformation, as well as enhancing delivery speed and lowering costs for shoppers. Despite the organizational change, however, the two brands will maintain their individual identities. Approximately 2,075 employees will be laid off as a result of the changes.
Together, HSN and QVC US generated $8.5 billion in revenue in 2017; reached 100 million homes through five broadcast networks; attracted more than 1 billion visits to their web sites; and shipped more than 170 million items. Additional benefits driven by the merger are expected to include:
- Enhanced product discovery and optimization of product offerings across channels, supported by expanded live and on-demand content;
- Improved delivery times and package consolidation; and
- Heightened focus, speed and agility in response to customer needs and market changes.
Combining Fulfillment And Buying Operations To Drive Efficiency
The first phase of the merger includes opening a new fulfillment center in Bethlehem, Pa. in 2019, as well as moving forward with planned facility closures in Lancaster, Pa., Roanoke, Va. and Greeneville, Tenn. in 2020. Other planned changes include:
- Combining HSN and QVC fulfillment centers into integrated facilities with the full product assortments of both brands;
- Relocating some fulfillment centers to reduce delivery times and lower expenses; and
- Upgrading fulfillment technologies, including deploying a proprietary warehouse management system.
Once completed, the integrated fulfillment network is expected to improve average delivery speeds by two days and enable more items to be consolidated into single shipments.
QXH will further build on its improved efficiency by structuring its buying organizations around seven categories: Apparel, Accessories and Jewelry, Beauty, Kitchen Electronics and Cookware, Home Innovations, Home Style and Consumer Electronics. Leaders will be assigned to develop and drive strategies for the QVC and HSN platforms in each category.
New Leadership Will Oversee The Combined Brand
As part of the changes, the role of President of QVC US will be eliminated. Steve Hofmann, who currently holds this position, with leave the company. The combined organization will be led by:
- Mary Campbell, CMO of Qurate and QVC US, who will be responsible for QXH’s merchandising, marketing, brand, and digital strategy, and the QVC US digital, content and broadcast operations; and
- Mike Fitzharris, President of HSN, who will be responsible for QXH video platform expansion and distribution, and HSN digital, content and broadcast operations.
The merger also will result in other personnel changes. Approximately 350 positions will be eliminated by the end 2018, the majority coming from HSN’s St. Petersburg, Fla. and Long Island, N.Y. operations. Another 1,725 positions will be eliminated due to the facility closures, which will be partially offset by the anticipated hiring of 1,200 to 1,500 positions at the new Bethlehem facility.