Qurate Retail Hit by ‘Intensely Promotional’ Environment

QVC owner and eCommerce platform Qurate Retail is facing a difficult road as it looks to navigate excess inventory in a post-pandemic eCommerce market.

President and CEO David Rawlinson II noted in a Friday (Nov. 4) press release that the company’s third-quarter 2022 earnings results indicated “an intensely promotional environment and weakened consumer sentiment.”

Qurate’s revenue decreased 13% to $2.7 billion, and its eCommerce revenue fell 13% as well, dropping to $1.7 billion, according to the release.

Meanwhile, QVC International revenue dropped 21%, QxH revenue fell 8%, and company-owned brand Zulily’s revenue declined 39%. However, another Qurate-owned retail brand, Cornerstone, increased its revenue by 8%, the release stated.

The company also announced in the release that it is restructuring its presence in Europe.

Qurate has entered into an agreement for sale and leaseback of its United Kingdom and Germany fulfillment centers for about 68 million pounds (about $77 million) and 97 million euros (about $96 million), respectively. The company plans to close this deal in the first quarter of 2023.

Qurate faced similar issues last quarter, with the company’s revenue decreasing 16% at that time.

But as the company heads into the fourth quarter, sentiment surrounding two quarters of weak earnings results has led Qurate to reevaluate its strategy.

“Despite soft results, we maintained our focus on progressing the five pillars of Project Athens [and] our three-year strategic plan to re-establish revenue growth…,” said Rawlinson said in the release.

The company fell victim to a fulfillment center fire at its Rocky Mount, North Carolina, location Dec. 18, resulting in “elevated warehouse and logistics costs during the three months ended Sept. 30,” and it “anticipates these increased warehouse and logistics costs to continue during 2022.”

But this quarter, Qurate received $180 million of insurance proceeds related to the fire, with $280 million of insurance proceeds received so far this year.

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