Evine Live Inc (NASDAQ: EVLV), the third-place television shopping channel, has just changed its corporate name to iMedia Brands (NASDAQ: IMBI) and will now trade on Nasdaq Capital Market, moving over from Nasdaq Global Select Market. With its shares tanking, it has 180-days until January 12, 2020 to comply with Nasdaq’s minimum requirement that its common stock trade above $1 for at least ten consecutive business days.
In a statement CEO Tim Peterman stated, “It became clear we needed our company name to better represent our growth strategy of building additional leading niche entertainment and shopping destinations in all forms of media that will engage our customers imagination.”
In addition to the corporate name change, the company also announced that after four years of trying to gain traction under its broadcast name of Evine, it is going back to a name it previously abandoned, ShopHQ, which was used from 2013 through 2014.
And this is hardly its first name change, only the latest. It previously went by ShopNBC and ValueVision too. Confused? I surely am, as I am sure customers will be too.
In an interview with the Star Tribune, Peterman went on to explain the new moniker. “ShopHQ is a far more intuitive name. It also allows us to market to it. When we were marketing to Evine, whether on a billboard or on TV, people wouldn’t know if Evine was an entertainment network or a shopping network. With ShopHQ, you instantly know what it is.”
But that is the point. It is both an entertainment network and a shopping network. The Evine name to me combined both concepts. ShopHQ puts it back in the shopping camp and nobody needs another shopping alternative. That is not the case when it comes to places to shop that are entertaining too.
If this name change, after three others, doesn’t confuse and confound its current shoppers, it surely will disappoint any new shoppers who happen to find it. “Shop Headquarters?” It is nothing like that. Amazon is shopper’s real “headquarters.”
Even in Evine’s prime, before many of its leading brands decamped the network for better prospects on HSN, including Beekman 1802, Skinn cosmetics and most recently Anuschka handbags, it still offered a limited selection of products compared to its chief competitors Qurate’s QVC and HSN.
And in another blow, Jane Fonda will not be launching her much-anticipated line of athleisurewear clothing with the company. After signing a three-year agreement last November under previous CEO Bob Rosenblatt, Fonda was going to promote her line on air from the company’s Los Angeles studio. But Peterman decided to close the LA business office, though it will keep its LA Studio running.
“We’ll be filming out of this studio end of the month with Serious Skincare. However, we closed our LA business office along with the team there overseeing the Jane Fonda collaboration. In light of the closure, both parties’ teams decided to go separate ways,” a company spokesperson said in a statement.
Now ShopHQ has even less to offer, unless you count all the Invicta watches it features in prime time. A $6 million stock purchase by Invicta Watch Group and another $11 million working capital resulting from the May 2019 investment transaction assures it gets prime slots. Also getting more airtime will be jewelry, beauty and wellness offerings, while the weak-performing home and fashion categories will get less in the future.
A rose by any other name…
A brand name change is nothing to do lightly, but it is a change that Ronald C. Pruett, Jr., managing partner at Boston Associates and who led a team that looked to acquire the company earlier in the year, says it is a step in the right direction. “It’s a more intuitive name. Over the years Evine never built any good will.”
That said, maybe the problem wasn’t the Evine name, but that the company didn’t effectively “market to it,” paraphrasing Peterman in his statement.
When contemplating a name change, Forbes Agency Council member, Howard Breindel, offers a warning. “A name change is not a panacea,” he writes.
In my view, Evine could have been made memorable because it combines some familiar hooks–“E” for entertainment and e-commerce, “Vine” as a destination, like 3rd and Vine. The company could have done a better job to create those associations.
Breindel goes further. “While it’s tempting to think a new name will solve many marketing and branding problems, it’s important to remember that a name can only do so much. A name on its own is meaningless until it is given meaning through consistent messaging, storytelling, design and customer experience.”
ShopHQ may be descriptive of what the company aspires to be, but it is also a lie. Under Evine, the company could have made it work, if it had invested the time, attention and resources to create the meaning and association for customers.
“If you’re questioning whether or not to rename,” Breindel writes, “The question itself is likely symptomatic of a larger issue: the need to redefine what your name stands for — to invest in your brand, not just your name.”
Clearly with the name change the company is trying to redefine what the name stands for, but it didn’t do such a good job the last time, or with its other names before. The question is whether it will be successful this time.
Cutting fat or needed muscle?
Despite the name change and its ShopHQ promise, it is offering less not more. And going forward it will have fewer people on staff to make the needed changes happen.
In a cost-cutting measure, the company has reduced its staff load by 20% and permanently eliminated 11 senior executive roles, including those responsible for business development, brand development, merchandising, marketing, planning and customer operations.
Seemingly, to fill the shoes of those departing senior executives is Jean Sabatier, who will take on the new role of chief commerce officer. Sabatier was previously with the company and served 11 years with QVC before that. “This is an important change expected to re-establish operating fundamentals in pricing, merchandising, programming and planning,” the company said in a statement.
Confident in Tim Peterman’s talent and experience, Pruett believes these radical changes are needed and that restructuring the management team is a step in the right direction. “If the previous management team represented the old way of doing business, then I don’t think he had any choice but to make these radical changes,” Pruett shares.
That said, will Peterman’s sharply reduced team be able to implement the radical changes needed to revive its television-shopping flagship ShopHQ, as well as bring on two new channels?
New shopping networks planned
On deck for a November launch is a men’s shopping channel called Bulldog Shopping Network. No doubt, this is driven by Invicta’s Eyal Lalo, whose company is heavy on macho-styled watches, and a desire to tap some of the new male shopping energy that Dollar Shave Club and Harry’s have found.
But television shopping has largely drawn a female audience and neither Pruett nor I are keen on the possibilities of this new venture. “I’m not sure that anyone worldwide has been able to do that successfully yet,” Pruett reflects.
However, we are much more bullish on the other new shopping channel in the works –a Spanish-language network called LaVenta Shopping Network. Set to launch in the first quarter 2020 and be headquartered in Miami and staffed by a Latin management team, it is described as “celebrating the Latin culture’s merchandise, services and personalities. Our programming will center on the top entertainment categories in the Latin culture such as beauty, watches, and jewelry. Our network will be authentic and focused.”
Other shopping channels have tried to unlock this market, including Home Shopping Espanol launched by HSN in 1998 and shuttered in 2002, but the time may be right for iMedia and LaVenta now.
The Hispanic population is among the nation’s fastest-growing ethnic group. It reached a total of 59.9 million people in 2018 and between 2008 and 2018 it grew from 16% to 18% share of the population. “Latinos accounted for about half (52%) of all U.S. population growth over this period,” reports Pew Research Center.
“LaVenta is a smart idea,” Pruett and I both agree.
ShopHQ flagship needs to be fixed first
CEO Peterman, new chief commerce officer Sabatier and the recently streamlined staff have a lot on their plate with these two new ventures coming online shortly and all the planning, testing, learning and adjustments that will be required during the early stages. But these may be a distraction when the flagship ShopHQ channel needs the most serious fix.
“They are in 87 million households,” says Pruett. “That is a real asset. But the way TV shopping is done is in need of rejuvenation. Yet I remain bullish on television shopping.”
Pruett sees the way forward is to entice more digitally-native, emerging brands onto the flagship network. But that is an uphill battle, as so many of the best and brightest see greener pastures in physical retail where customers can touch and feel their offerings, which they can’t do either through e-commerce or the television channels.
Yet television shopping offers entrepreneurs a story-telling ability unmatched in any other media. Every entrepreneur is passionate about their product and eager to tell their story, believing that if they can tell it to the right people, that they will be won over too. A television shopping platform like ShopHQ is an unrivaled way to do that. In-store personal appearances are fine, but on television, entrepreneurs can reach mere hundreds, if lucky, not millions as on television.
ShopHQ has serious work to do to save itself. It must restore confidence and loyalty among its existing customers, which declined by 7% in first quarter 2019 compared to same quarter last year, along with a 16% drop in sales. While the name change is intended to help with that, it may ultimately hurt it through customer confusion and false promises.
And most especially, it needs to bring in new customers. To do that, it needs new, more relevant and engaging products, not the same-old, same-old that it has shown recently.
So ShopHQ has a big selling job to do, both to consumers and to brands to attract them to the network. Until then, it doesn’t seem to have the stuff that will keep channel surfers from surfing on by.