Liberty Interactive Corp. is being renamed the “Qurate Retail Group,” which will be led by Mike George who has been named president and chief executive officer.
The formation of the Qurate Retail Group, composed of QVC, HSN, Zulily, Ballard Designs, Frontgate, Garnet Hill, Grandin Road and Improvements, is a result of Liberty’s acquisition of HSN, completed in December. In 2017, Qurate Retail Group generated pro-forma revenue of $14 billion. Qurate has 27,000 employees in the U.S., the U.K., Germany, Japan, Italy, France, Poland and China.
The renaming will take effect later this month, when the company completes the split-off of the GCI Liberty telecommunications company. George will become ceo and president at that time.
Qurate is a play on QVC and the word “curate.”
According to George, who currently serves as ceo of QVC Inc., the Qurate Retail Group ranks number-one in video commerce based on reaching 370 million homes worldwide via 16 television networks and multiple e-commerce sites, social pages, mobile apps, print catalogues and in-store destinations. Qurate also ranks third in e-commerce in North America and in mobile commerce, behind Amazon and Walmart.
Qurate and its pumped-up portfolio will have a greater impact on many brands. While retail consolidations could lead to increased price pressures on vendors, they also present opportunities. Vendors can grow by gaining access to a wider set of businesses to sell to, and by offering new products and collaborations. There’s also an opportunity for distribution outside the U.S. through QVC International for brands selling HSN, which does not distribute overseas.
George said the strategy with vendors would evolve over time, and that the intent is to maintain a portfolio where the different networks, web sites and catalogues have distinct offerings. “I don’t think it’s good for customers to carry the exact same brands,” across Qurate’s different divisions. “In some cases, where a brand is national in scope, if it’s more broadly distributed, we could bring one of the flavors of the brand to one network, and another flavor to another network. There is also a good opportunity to work with multi-brand vendors in a more strategic way.”
As an example, George said a brand sold on HSN or QVC could create a special event just for Zulily, the web site Liberty acquired in 2015.
Qurate will be able to leverage its technology platforms and resources across the brands. “We love the fact that we can combine our resources. We can innovate that much faster,” George said, noting that Qurate is in the process of combining the online marketing teams.
“Qurate Retail Group will be a new venture in more ways than just a change of name,” said Greg Maffei, who shifts from president and ceo of Liberty, to chairman of Qurate, after the split-off of GCI Liberty. “We will be a select group of like-minded businesses that provide customers with curated collections of unique products, made personal and relevant by the power of storytelling, combining the best of retail, media and social.”
The executives said Qurate provides a “third way to shop” that’s different from transactional e-commerce or traditional brick-and-mortar.
“The third way is about creating highly engaging shopping experiences. It’s all based on curation,” George said. Referencing Qurate as a third way of shopping “helps our team to think of our unique place in retailing,” he said.
“One-hundred thirty items are put on air each day, including 40 that are brand new and never seen before,” George said, illustrating a point about QVC’s track record of curating.
He said Qurate’s buyers take a different approach from department and specialty stores. “It’s about picking great items versus big open-to-buys or vendor matrices,” George said. The company boast strong personal connections and loyalty with customers. “We have the numbers to back that up.”
With the company’s new name comes a new corporate logo, though each of the eight businesses of Qurate will maintain its own logo and shopping experience.
To accelerate innovation, Qurate Retail Group recently formed a new ventures team to develop retail concepts. It’s led by Darrell Cavens, the cofounder of Zulily.
On Thursday, the company also reported that for the fourth quarter, revenues at the QVC Group rose 6 percent to $2.82 billion from $2.66 billion in the year-ago period. Operating income rose 23 percent to $496 million from $404 million. The numbers do not include HSN results.
For the year, QVC Group’s revenue rose 1 percent to approximately $8.8 billion from $8.7 billion, while operating income was up 12 percent to approximately $1.34 billion, from $1.2 billion.
Among the highlights of 2017:
• QVC in the U.S. returned to “healthy sales growth.”
• QVC International had “a stellar year.”
• Zulily had a strong second half.
• Liberty closed on its HSN acquisition, a stock deal valued at $2.1 billion.
• The company reorganized its leadership team.
On the other hand, HSN had a 7 percent revenue decline in the fourth quarter, in contrast to many retailers reporting gains for the period. George attributed the decline in part to the distraction of the acquisition, senior management leaving and the need to work on some fundamentals including more diverse assortments and newness.
Qurate Retail Group will trade under new ticker symbols “QRTEA” and “QRTEB” on the NAsdaq and will include the businesses and assets attributed to QVC Group tracking stock (Nasdaq: QVCA, QVCB), including QVC, HSN (which includes Cornerstone Brands) and Zulily.