Mark C. Bozek, the newly installed chief executive officer of ValueVision Media Inc., is showing he is thinking out-of-the-box.
In Bozek’s first conference call Wednesday in connection with second-quarter results — he began on June 23 following a proxy fight led by activist investors that resulted in a reconstituted board and Bozek as ceo — he gave investors an idea of his vision for disrupting the blend of commerce and entertainment.
Earlier this month, the Minneapolis-based ValueVision, a multichannel electronic retailer that operates the site ShopHQ, premiered Mark Cuban’s “American Dream” show, which introduced nine entrepreneurs Cuban personally backed as an investor on ABC’s “Shark Tank.” Cuban, himself an entrepreneur, owns the Dallas Mavericks of the National Basketball Association.
According to Bozek during the conference call, the entrepreneurs “presented their products in two fun, dynamic hours on ShopHQ. Many of the products sold out within minutes of going on air and we doubled our viewership as well.”
Bozek focused on that programming as an example of his search for new and exclusive proprietary brands for the site. And while others are going the traditional route of scouring trade shows for ideas, Bozek is planning on expanding his sourcing horizons.
“There are smart ideas and smart fledgling businesses that are just a few clever clicks away in the commerce world online. So we’re going to be surfing in those worlds as well,” he said.
In a telephone interview, Bozek said proprietary brands are necessary to capture market share since an e-commerce site can’t compete solely by offering the “lowest price in town,” like what the flash-sale model does. ShopHQ, with an audience of 87 million viewers, is far smaller than its competitors HSN and QVC. That forces it to chase smaller, lesser known brands — ones that don’t yet have either the mass volume or the brand recognition to be sold on its larger counterparts. And Bozek knows the home shopping model well enough to know what would work: he was the former ceo of HSN and was a senior vice president at QVC.
“If we act our size, then we can go competitively to the vendor community and say that with 160 hours [of programming available] we can be a launching pad to build and incubate great brands created from scratch,” Bozek said.
By that he’s talking about building over time from season to season, and from one stockkeeping unit to five or 10 and growing volume eventually to 10,000 items and then over 20,000 items.
When asked if an acquisition or two could be in the works, Bozek said: “We’re considering all potential options.” He explained that one possibility is buying a start-up brand, having it be an exclusive for the site and then “incubating the brand online. These are areas we are surfing.”
For the second quarter ended Aug. 2, which reflects operations and merchandising decisions largely from the former team, the net loss was $4.3 million, or 8 cents a diluted share, compared with a year ago net loss of $800,000, or 2 cents a share. Excluding the costs associated with the proxy fight and ceo transition, the company posted adjusted net income of $800,000, or 1 cent a diluted share, against a net loss of $800,000, or 2 cents, a year ago.
Shares of ValueVision fell 6.2 percent to $4.70 in Nasdaq trading.
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