There's 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 96 million US homes, and a related website at 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 outlets. Founded in 1977, HSN was a subsidiary of Barry Diller's IAC/InterActiveCorp until 2008, when it was spun off.
The recent deep recession in the US made for a rocky business environment for HSN and other retailers. Nevertheless, HSN was able to ride out the downturn and rebound along with the economy in 2010, thanks to some pretty profit margins. The HSN business, which generates about 70% 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 has allowed the company to weather the recession and log a 35% profit margin in 2010. Sales at HSN increased by 5%, while the Cornerstone business saw its sales rise by 19% in 2010. 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 275 million catalogs annually and operates seven separate websites.) High performing categories for HSN included electronics, fashion, and wellness.
HSN's sales are increasingly coming from its website, HSN.com, which grew 11% in 2010, vs. a 5% increase for the non-Internet business. Since its launch in 1999, HSN.com has grown to account for nearly a third of HSN's total sales. As of August 2009, shoppers can purchase merchandise from HSN.com using Apple's iPhone.
The company's focus on marketing 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.
HSN, which accounted for about half of IAC's revenue prior to the separation, was one of four businesses spun off by Diller so that the companies could trade and operate as separate entities. Following the spinoff,Liberty Media Corporation (an investor in HSN's former parent IAC) owns about 32% of HSN's shares. Liberty opposed the spinoff, arguing that it diluted Liberty's control. In return for ultimately agreeing to the spinoff of HSN (and other IAC companies), Liberty was awarded representation on HSN's board of directors.
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