DOW JONES NEWSWIRES
ShopNBC said will continue to try and stay in business after
being unable to find a buyer as the television-shopping network
promoted President Keith Stewart to chief executive and sees
sharply weaker results for this quarter.
The company, owned and operated by ValueVision Media Inc.
(VVTV), in September began reviewing its options as sales continued
to sag. Its shares slumped 19% in early trading to 42 cents; the
stock is down 92% the past year.
ShopNBC said Tuesday that while there was interest in buying or
entering into other relationships with the company, no one
submitted a final bid amid the market turmoil, woes in the retail
industry and the possible redemption of convertible stock by
General Electric Co. (GE). ShopNBC currently has to pay $44.3
million to GE this spring, and talks to extend and restructure the
deal are ongoing.
At the same time, the board considered liquidating the company
and distribution assets to shareholders. But a board committee
determined shareholders would likely not see anything from a
liquidation.
So, the company is enacting new strategies, including cutting
its cable- and satellite-transmission fees, which may reduce the
number of homes the network is currently seen in, while Chairman
John Buck gives up day-to-day control of the company. ShopNBC is
available in 72 million homes and the transmission fees make up
half of the company's operating expenses.
Meanwhile, ShopNBC projected fiscal fourth-quarter revenue at
about $142 million, down 35%, amid lower average selling prices.
The net loss for the quarter ending this week is expected to
balloon to $40 million from $1 million. The company cut 11% of its
salaried work force during the quarter; it had about 850 employees
in total.
In addition, inventory is down 35%.
-By Kevin Kingsbury, Dow Jones Newswires; 201-938-2136;
kevin.kingsbury@dowjones.com
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