With QVC's 2012 results, looking back and ahead

Posted: March 04, 2013

Retailers, who closed the books on their fiscal years in January, are just beginning to release their financial results for 2012.

Struggling J.C. Penney Co. Inc. saw its shares plunge 17 percent one day after announcing a net loss of $985 million, or $4.49 per share, and a 25 percent decline in sales for 2012.

Urban Outfitters Inc., the Philadelphia-based chain that has been a favorite on Wall Street, won't release complete financial results until March 11. But last month it reported a 17 percent increase in fourth-quarter sales and a 13 percent increase in full-year sales.

Given the explosion in technologies offering consumers more choices on how to buy just about anything, earnings reports are a snapshot of how they are adjusting. It is also a good time to revisit one Philadelphia-based retailer that was founded in the mid-'80s to disrupt the traditional retail industry.

QVC Inc., of West Goshen, is currently a subsidiary of Liberty Interactive Corp., but make no mistake: The television shopping network accounts for most of the parent's sales and profits.

QVC's global sales rose 3 percent to $8.52 billion in 2012. That is not robust growth, but revenue from e-commerce rose 12 percent last year to $2.2 billion. Forty percent of its U.S. revenue of $5.59 billion came by way of online sales.

That success with e-commerce shows QVC isn't ready to allow its business model to be disrupted into the history books like the big-city department store.

Internet Retailer, a trade publication, ranked Liberty Interactive No. 7 on its list of the top 500 business-to-consumer retailers, based on 2011 online sales. Amazon.com was No. 1, followed by Staples, Apple, Walmart.com, Dell, and Office Depot. That places QVC ahead of Sears, Netflix, and Best Buy.

QVC has built a U.S. customer base of 7.3 million - of which 64 percent are women between 35 and 64 years old. Still, the company isn't resting on its TV monitors.

QVC acquired two online businesses in 2012: Send the Trend Inc., a New York-based e-commerce destination for fashion, and Oodle Inc., a San Mateo, Calif.-based social marketplace.

It continues to expand internationally. Japan, where QVC is preparing to open new broadcast studios in April, is its second-biggest market behind the United States. During July, it launched in China through a joint venture with China Broadcasting Corp.

However, QVC's fortunes remain tied to trends in the U.S. market. Asked on a Wednesday conference call about the impact of the payroll tax hike in January, QVC U.S. CEO Claire Watts said the company had not detected any change in customer behavior.

"It is something we are watching very closely," she said, "because, again, any money taken out of the pocketbook is not good for retail and not good for us."


Contact Mike Armstrong

at 215-854-2980 or marmstrong@phillynews.com, or @PhillyInc on Twitter.

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