Cable-shopping network Evine Live has 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 provides Invicta and its partners sweeping control over Evine, which has been reviewing strategic alternatives to try to regain profitability.
With the deal comes a new CEO: Tim Peterman, one of the stock investors and a former top executive of the Eden Prairie-based company.
Current Chief Executive Bob Rosenblatt was terminated without cause, the company said in a regulatory filing Friday. Evine said that Rosenblatt did not resign from the board, and will retain his seat for now.
Evine shares gained 24 cents to close Friday at 61 cents, a daily gain of 66% on the Nasdaq Stock Market.
Based in Hollywood, Fla., Invicta has been selling its line of watches through Evine for more than 20 years. The additional financial backing in Evine, a distant third to QVC and HSN, affords the watchmaker immediate influence over Evine's daily operations and long-term vision.
Invicta CEO Eyal Lalo, 44, whose investment company sank $4 million into the stock, was named vice chair of the board. Another associate, Michael Friedman, whose company is the exclusive TV shopping distributor for Invicta products, also will join the board. Friedman, 48, and Leah Friedman invested $1.35 million in the stock deal.
The investors purchased Evine stock at 75 cents, nearly double its trading price at the time. They also have five-year warrants to purchase up to 3.5 million shares at $1.50.
Peterman, 52, had been chief operating officer and chief financial officer of AmeriMark Interactive, a Chicago-based e-commerce company with $750 million in sales. He was first hired by Evine in 2015 as its chief financial officer. He added the chief operating officer title in 2017, the year Evine produced its first profit in a decade. He left the company in April 2018.
Peterman purchased stock worth $125,000.
As part of the deal, Invicta extended a $5 million line of credit for Evine to purchase additional inventory. It also said it would invest $25 million in product for Evine for the fall season, and agreed to a five-year exclusive TV retail partnership.
Evine Live reaches about 88 million homes through its cable channels and online site. It has felt the squeeze in recent years as younger consumers have cut the cord from cable and online retailers such as Amazon have risen in prominence.
In January, Nasdaq warned the company that it was in danger of being delisted from the stock exchange because shares were trading below $1 at the closing bell for 30 consecutive business days. Evine has until July 15 to come into compliance.
Peterman said in a statement that he expects a "collaborative transition."
"As Bob knows, our vision for the company remains fundamentally unchanged," he said. "I look forward to working with the team and the board on new growth strategies and expect to have further details on such strategies in the near term."