How will QVC’s HSN takeover affect the jewellery industry?
The world of e-commerce is about to get a little bit more interesting. QVC, a giant in the world of televised home shopping, has entered into an agreement to purchase its longtime rival, HSN Inc., for USD $2.1 billion in stock.
Liberty Interactive, parent company of QVC, already owns 38.2 per cent of HSN. With this new move, it will acquire the remaining 61.8 per cent, turning it into a wholly owned subsidiary.
According to a company statement, this merger will create synergies from cost reduction and revenue opportunities; cross-marketing between existing and potential customers; and increased development of the channels’ e-commerce and mobile platforms.
“There is so much change going on in retailing,” says QVC’s CEO, Mike George. “It just felt like in a world of rapidly changing technology, [a] rapidly changing retail landscape, now is the time to combine forces…[so] we compete that much more strongly in the broader retail marketplace.”
Set to bring the two TV shopping giants under the same roof, this new merger could spell some trouble for the jewellery industry. While jewellery does not make or break business for the TV channels, it still makes up a decent segment of their business. According to JCK Online, jewellery represented 9 per cent of QVC’s sales in fiscal 2016, down from 10 per cent in 2015. What’s more, 7.9 per cent of HSN’s sales came from jewellery in 2016, down from 8.4 per cent a year prior.
According to the New York Post, this acquisition will also make Liberty Interactive a substantial player in e-commerce—it will trail behind only Amazon and Walmart in North American digital sales.
The acquisition should be completed by the fourth quarter of 2017. With these applications in both the jewellery and e-commerce industries, this story is certainly one for jewellers to watch. As this merger takes place, independents and large companies alike must continue to step up their e-commerce capabilities in order to compete.