Qurate Retail Group Announces Three-Year Growth Plan, ‘Project Athens’
June 27, 2022: In a livestream investor event this morning, David Rawlinson, President and CEO, Qurate Retail, Inc., shared a three-year turnaround plan for the company, designed to stabilize and differentiate the core businesses and expand the company’s leadership in video streaming commerce. The five-point plan includes actions intended to strengthen customer relationships, improve execution, reduce costs, optimize the brand portfolio, and grow faster in streaming. Here’s a closer look.
Pillar 1: Improve Customer Experience and Grow Relationships
Earlier this year, Qurate Retail Group announced leadership appointments for its flagship businesses – Mike Fitzharris at QVC US and Rob Muller at HSN – and they are rebuilding each brand’s connections with its customers. QVC is doubling down on its mission to be the premier experiential retailer for women over 50 who love to shop, a relationship-driven shopper who is constantly in the know. HSN is rediscovering its mission to cater to boutique shoppers who are 40+ and are looking to celebrate their uniqueness and individuality.
Pillar 2: Rigorously Execute Core Processes
Qurate Retail Group is the best in the world at telling the human story behind a product and then sharing a clear and compelling value proposition for that product. The company is working to increase rigor around the processes that deliver these experiences, in such areas as assortments, pricing and programming.
Pillar 3: Lower Cost to Serve
Qurate Retail Group is resetting its cost base to improve profitability and cash generation. Over the next 24-36 months, the company will work to reduce operating costs in its fulfillment network and improve delivery times. The company is also working on opportunities in product costs, supplier costs, inventory, real estate footprint and staffing.
Pillar 4: Optimize Brand Portfolio
Qurate Retail Group is exploring untapped opportunities at Zulily and our Cornerstone brands.
Zulily is poised to benefit from influencer marketing trends and excess inventory across retail. This team is also doubling-down on the experience with moms, with an always-on catalogue targeted at mom and baby, a space that many offline retailers are shrinking or abandoning.
The Cornerstone brands have delivered strong top- and bottom-line performance in the last two years. This team has a strong revenue growth plan, which includes expanding its highly profitable retail footprint.
Pillar 5: Build New High-Growth Businesses Anchored in Strength
The video streaming shopping market is at a tipping point, and Qurate Retail Group is poised to benefit.
On large screens, like smart TVs, QVC and HSN are available in more U.S. homes on a streaming service than they are over linear TV. In its first three months, Qurate Retail Group’s newest business unit, vCommerce Ventures, has launched several new, exclusive content program and deal concepts. As a result of this effort, streaming viewership has grown by more than 70% since the beginning of the year and monthly active users (MAUs) of the QVC+ and HSN+ streaming experience have grown to almost 600,000.
On small screens, like smartphones, the company is building a next generation shopping app, featuring vendors with self-made content.
Project Athens will not happen overnight or without hard choices and relentless focus on execution, Rawlinson noted. But the plan is designed to return Qurate Retail Group to stable revenue and double-digit compound annual growth in OIBDA and free cash flow through 2024.
“We are fully committed to the successful execution of this transformation plan,” Rawlinson said. “Qurate Retail has a highly differentiated core live video streaming business that is the worldwide leader in video-based commerce with a loyal, subscription-like, higher income customer base that is engaged. We have a clear and executable transformation plan that is poised to deliver a stable top line and an expanding bottom line over the next three years. We also have the opportunity to exploit market-leading complementary brands for mom and for home, and we are well positioned to take advantage of two fast growing trends: streaming and livestream shopping.”
A replay of the 2022 Qurate Retail Investor Event will be available here.