No need to worry about normal business hours when shopping with this retailer. HSN (known to night owls and from-the-couch shoppers as Home Shopping Network) operates a home shopping television network, which reaches some 95 million US homes, and a fast-growing online business HSN.com. In general, HSN sells apparel and accessories, jewelry, electronics, housewares, and health, beauty, and fitness products. Its Cornerstone Brands business is a catalog and Internet retailer whose titles include Garnet Hill, Smith+Noble, and TravelSmith, among others. The segment also operates about 20 retail shops. Founded in 1977, HSN appended an "i" (for interactive) to its name following its spin off from IAC/InteractiveCorp.
While HSNi got its start in the early 1980s hawking products round the clock on television, it launched an online shopping site, HSN.com, in 1999. HSN.com, which features more than 60,000 product videos available for sale, has grown to account for more than 40% of HSN's total sales. HSN2 (launched in 2010) is a network that distributes taped programming on a limited distribution basis. The company's broadcast and online media activities account for more than two-thirds of sales, while Cornerstone Brands' catalogs, websites, and retail stores bring in the rest.
The multi-channel retailer's sales increased 6% in 2012 vs. 2011, while net income rose 6% over the same period. HSNi's Cornerstone Brands business outperformed HSN, with sales up 10% and 5%, respectively. Digital sales grew 13% in 2012 vs. the prior year. HSN's increase in sales was driven by growth in home design, household, beauty, and culinary products, offset by lower jewelry sales. Cornerstone sales got a boost from home brands catalogs (Ballard Designs, Frontgate, Grandin Road, and Improvements), the acquisition of Chasing Fireflies in spring 2012, and higher catalog circulation. 2012 marked the third consecutive year of sales and profit growth at the company, following a rough patch during the recession, which led to falling sales and profits.
The company attributed Cornerstone's double-digit sales growth to investment in circulation at its three largest brands: Frontage, Ballard Designs, and Garnet Hill. (Cornerstone distributes more than 300 million catalogs annually and operates eight Internet sites.)
Growth engines for the company include digital sales and Cornerstone Brands, which are both posting double-digit sales increases. Building on Cornerstone's success, HSNi in April 2012 acquired Seattle-based Chasing Fireflies, a direct marketer of children's apparel, juvenile furniture, bedding and accessories. Cornerstone will leverage its infrastructure and direct marketing expertise to grow the upscale children's brand.
The HSN business, which generates more than two-thirds of the company's sales, boasts a flexible business model that enables the retailer to quickly change its merchandise mix to meet customer demand. Being able to react quickly allowed the company to weather the recession and remain profitable.
The company's focus on selling HSN-exclusive items is a marketing strategy that has worked well. Under former NIKE executive Mindy Grossman, who joined HSN in 2006 as CEO, the company has boosted sales by ditching hour-long programs that focus on one product --such as a treadmill -- and paring down its celebrity-driven product pitches. The company's aim is to promote itself as a lifestyle, editorial programmed commerce network with great products and engaging presentations, including more than 16,000 product videos on HSN.com.
Liberty Interactive Corp. owns more than a third of HSN's shares. It is the company's largest shareholder.