ValueVision ousts new CEO after five months

There's turmoil at the top once again at ValueVision Media Inc., which operates struggling home shopping network ShopNBC.

The Eden Prairie-based company ousted CEO Rene Aiu on Friday after five months on the job, while also reporting that second-quarter sales have fallen by a quarter and losses have tripled from a year ago.

Board Chairman John Buck, 58, who hired Aiu in March after serving as interim chief, will become ShopNBC's new CEO.

Keith Stewart, 45, a veteran manager with home shopping industry leader QVC, will become president and chief operating officer. He also was named to the board of directors.

Buck said Aiu's dismissal was directly related to the luxury shopping network's dismal financial results.

For the quarter ended Aug. 2, revenue plummeted 26 percent, to $142 million, the company said. Adjusted earnings before income, taxes, depreciation and amortization swung to a $10.7 million loss from a $1.8 million gain a year ago. Net loss for the quarter widened to $15.7 million, from $5.4 million in the year-ago period.

The earnings report will be discussed in a conference call with investors at 10 a.m. Monday.

ShopNBC is the nation's third-largest TV home shopping network, behind leader QVC and Home Shopping Network. It has about a 10 percent share of the home shopping market, reaching about 70 million households with about $70 million in sales. General Electric and its entertainment subsidiary, NBC Universal, is its largest investor, with an 18 percent stake.

ShopNBC has not made a profit since 2001, and has undergone years of tumult and leadership changes. It's the third CEO change since October, when William Lansing, a former NBC Internet and Fingerhut executive, was shown the door after 3 1/2 years.

In the past 15 months, the company has had two rounds of layoffs in which it cut about 22 percent of its staff.

The stock, which traded at $57 in 1999, is valued below $3 today. Shares dropped 17 percent Friday, to $2.26, on the news of poor earnings and the revolving door at the top.

When reached Friday, Aiu declined to comment.

Aiu attempted to begin moving the channel away from its focus on high-end jewelry and consumer electronics and broaden into accessories, silver jewelry and cosmetics. She said her goal was to draw in more value-minded shoppers and to encourage repeat customers.

Retailers nationwide have seen sales tumble as consumers -- worried about gas, food and housing -- are paring discretionary spending. The luxury segment, which makes up the bulk of ShopNBC's core customer, has been particularly hard hit as so-called "aspirational" shoppers, who traded up during good times, are now seeking lower-priced goods.

The average price of an item on ShopNBC is about $225, compared with QVC's $40 average, ShopNBC officials said.

Buck, who has served on the ShopNBC board since 2004, took over in an interim role after Lansing's departure. Buck also has served as CEO of Medica, Minnesota's second-largest health insurance company. And like Lansing, he was a former executive at Fingerhut Companies.

Stewart has worked at QVC for 15 years, most recently as vice president of global sourcing at QVC America. A native of Chicago, he spent six years in Dusseldorf, Germany, helping to bring profitability to QVC's German unit.

"There's no question that it's a very difficult economic environment, and there's no question that it's going to take time to rebound," Stewart said. "But we're in this for long-term, sustained growth."

The company also announced the departures of three other executives who were hired in April: Glenn Leidahl, chief operating officer; Terry Curtis, senior vice president of customer analytics and sales planning; and John Gunder, senior vice president of media and on-air sales.