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Home shopping networks refine their pitch

West Chester, Pennsylvania

THE Home Shopping Network is getting an image makeover.

A US television network where shoppers can buy everything from electronics to kitchen gadgets, the Home Shopping Network is overhauling its line-up to offer more beauty products while adding streamed video content to win over shoppers without cable TV.

A division of Qurate Retail Group, the network is facing growing competition from Amazon Inc and Evine Live Inc for consumers, such as 24-year-old Erin Bounds, who regard buying products through TV shows as a relic of the past.

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"Someone who is 24 doesn't have the time nor desire to watch an hour-long show about a piece of jewellery or a vacuum when they can get an answer and the product quicker and probably cheaper on Amazon," said Ms Bounds, a resident of Ellicott City, Maryland.

For decades, the main difference to shoppers between HSN and Qurate's other shopping network, QVC, typically came down to variations in branding and merchandise, with HSN selling more electronics. Qurate acquired HSN in late 2017 for US$2.1 billion so that the two shopping networks could join forces to better compete against Amazon and its home-shopping-style online video promotions.

Qurate executives told Reuters they now are culling HSN's core merchandise offerings to eliminate many higher-priced electronics and some home goods, such as vacuum cleaners and blenders.

Instead, they are adding more niche cosmetic and apparel brands to help draw some distinction with QVC. They are also pushing both QVC and HSN to pursue younger shoppers with click-to-buy links on Instagram and Facebook Live for items such as earrings, shoes and Vince Camuto jeans, in a bid to spark a rebound in demand.

Second-quarter revenue at HSN declined 12 per cent to US$473 million from US$533 million a year later the company announced on Wednesday. Stock in the company, which counts media mogul John Malone as one of its largest investors, is down about 8 per cent year to date, compared with a 14 per cent increase for the Nasdaq index, and 64 per cent increase for Amazon.com year to date.

"You're seeing the impact of them digesting a large organisation that is clearly not growing if you look at the numbers," said Ben Claremon, partner and research analyst at investment firm Cove Street Capital, one of Qurate's shareholders.

"There's just not the degree of demand for home shopping products, and the desire to spend hours of the day watching them diminishes as you go down in age," he said.

The new strategy is aimed at creating more distinction with the two cable channels after the merger, according to Rob Robillard, the new vice-president of beauty integration at Qurate. REUTERS

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