Evine Live has a new name (which actually is an old name), a drastically slimmed down executive roster and a newly installed chief executive who said Wednesday that he had already begun “remediation actions” that would return the long-struggling cable shopping network to profitability.
Tim Peterman, a former Evine executive who took over as CEO on May 2, explained the moves as the company reported a worse-than-expected first-quarter loss of $21 million, or 31 cents a share. A year ago, the company posted a $3 million loss.
Saying that the Evine Live name had never resonated with customers, Peterman said the Eden Prairie-based network will reclaim the ShopHQ brand, which it used from 2013 to 2015. Before that, the channel was known as ShopNBC and ValueVision.
The company said it has eliminated 11 senior executive positions along with an undisclosed number other full-time positions, mostly at headquarters.
Referring to it as a “cost optimization event,” Peterman said the move trims about 20% of the corporate and executive staff. After accounting for costs of up to $4.5 million associated with severance packages, it will slash $15 million in annual overhead.
“So the first question on the shareholders’ mind in our view is, when can we expect better results?” Peterman said in his first earnings report. “We believe the answer is immediately in the second quarter.”
Evine leaders said they expect “improvement” in both top-line sales and earnings before interest, taxes and other costs, also known as EBITDA, by next quarter. They forecast a positive EBITDA in the third and fourth quarters compared with the same period a year earlier.
Wall Street didn’t respond in kind to Peterman’s optimism. Evine shares dropped nearly 9% in early trading and ended the day down more than 4% at 43 cents. Meanwhile, the company has until July 15 to bring its stock above $1 or face delisting from the Nasdaq exchange.
Peterman, who had been Evine’s chief operating officer and chief financial officer until April 2018, rode into power as Evine received a $6 million infusion of cash in a stock deal driven by one of its longest and most profitable vendors, the Invicta Watch Group.
The multifaceted deal provided Invicta and its partners sweeping control over Evine. Invicta CEO Eyal Lalo, whose investment company sank $4 million into the stock, was named vice chairman of the board.
Peterman was blunt about the need to strengthen vendor relationships to shore up sales. The company reported sales of $131.5 million during the quarter, a drop of 16% compared with last year. Year over year for the past three quarters, Evine’s revenue has dropped $79 million, with EBITDA declining $33 million.
Some of this may sound familiar. A cavalcade of CEOs, activist shareholders and former executives have tried to re-energize the brand with name changes, new brands and cost-cutting moves with little lasting success. Evine remains a distant third to rivals QVC and HSN.
“We get it,” Peterman said. “Our shareholders and vendors are frustrated, and they should be.”
Peterman said he plans to branch into niche markets, including using an existing channel to launch a men’s shopping brand called Shop Bulldog, and to build a new Spanish-language channel LaVenta in the first quarter of 2020.
Peterman hired another former Evine executive, Jean Sabatier, for a new position of chief commerce officer. His role will be to refocus the company’s efforts on categories that work — jewelry, beauty, wellness and watches — and dial back on categories in which Evine consistently loses out to QVC and HSN, such as home and fashion.
Michael Porter, the former vice president of finance and investor relations, was named chief financial officer, replacing Diana Purcel.
Bob Rosenblatt, who had led the company for the past three years, was terminated without cause in the shake-up but retains a seat on the board of directors. He will be paid about $2 million in salary and severance, according to regulatory filings.