ShopNBC names Aiu as CEO

ShopNBC, the struggling 24-hour luxury shopping channel operated by ValueVision Media Inc., on Monday named industry veteran Rene Aiu as its new president and chief executive officer.

Aiu, 58, has spent more than 22 years working in television shopping and e-commerce, and was CEO and president of a company that launched a successful TV shopping channel in Japan.

She joins a company weighed down by months of tumult and years of losses.

CEO William Lansing was ousted in October and the company lowered its sales outlook as consumers cut back their spending amid worries about paying more for food, fuel and housing.

On the recommendation of a consultant hired to help orchestrate a turnaround, the Eden Prairie-based company in January laid off 10 percent of its salaried workforce, -- about 59 mid- and senior-level managers who worked mostly in human resources and merchandising. Those cuts followed a 12 percent workforce reduction in May.

"ValueVision has struggled for some time to show meaningful profitability or cash flow," said Bob Evans, an analyst with Craig-Hallum Capital Group in Minneapolis. "The fact that the new CEO has significant experience in the industry will be well received by investors who have been frustrated in the past that the new CEO has taken a year or two to learn the business."

ValueVision announced Aiu's hiring after the stock market closed Monday. Shares closed at $5.19, and were flat in after-market trading.

ShopNBC is the nation's third-largest TV home shopping network, behind leader QVC and Home Shopping Network. With distribution to about 70 million homes, it has just under a 10 percent share of the market, according to Evans' estimates. General Electric and its NBC subsidiary own nearly 30 percent of ValueVision's common stock.

In 2006, sales at the ShopNBC website made up 24 percent of ShopNBC's sales, with great potential to grow, Evans said.

ShopNBC has tended to appeal to a more well-heeled customer, with an average ticket price of $200 per item. Jewelry remains its top-selling product, but ShopNBC has been working to broaden its offerings to include cosmetics, flat-panel televisions and other consumer items.

Despite steady sales increases, ValueVision has not made a profit since 2001. Fourth-quarter and year-end results will be released March 19.

In January, ValueVision reiterated its full-year guidance for sales growth in the low single digits, and adjusted earnings of $5 million to $10 million before interest, taxes, depreciation and amortization.

The company reported third-quarter losses of $5.8 million, or 16 cents a share, compared with the same period last year. Revenue was flat at $185 million.

ValueVision is in the process of renegotiating contracts with product vendors and major suppliers to lower its distribution costs and increase profit margins, a sign that Evans said will make it more competitive with QVC and Home Shopping Network and could improve the bottom line.

"Besides this strong domestic and international background, she brings a very strong background in marketing, sales, programming, planning and TV production," said John Buck, Value Vision's board chairman who has been serving as interim CEO for the past four months. "We have somebody coming in that really understands this business and brings that depth of experience."

Aiu has strong ties to the Home Shopping Network. She worked there for three years, then partnered with it, Liberty Global and Sumitomo Corp. while at Jupiter Shop Channel Japan to launch what would become Japan's top television shopping company.

Aiu spent a decade in Japan with Jupiter Shop Channel.

Aiu, who currently lives in Oxnard, Calif., a beachfront town near Ventura, worked in the Twin Cities for two years starting in the mid-1980s for Cable Value Network, which later merged with QVC.

"I feel like I'm coming home," Aiu said in an interview Monday. "There are a lot of terrific assets here [at ShopNBC], some of which we can maximize on, and some of which have been underutilized. It's an exciting opportunity and challenge for me."

Jackie Crosby • 612-673-7335