Ecommerce sales decreased for Qurate's brands HSN and QVC in Q4 and 2019. Zulily's sales also were down 18% in 2019.

2019 was a tough year for Qurate Retail Inc., as consumers canceling pay-TV subscriptions hurt home shopping networks QVC and HSN (now QxH), while revenue fell 18% for online retailer Zulily amid tougher competition from emerging direct-to-consumer brands. And the coronavirus has introduced new headwinds in 2020, company officials said in reporting fourth quarter and full-year 2019 results Wednesday.

Most affected by the coronavirus has been Zulily, a daily-deal site that relies largely on Chinese suppliers and carries little inventory. “As a result, we’ve had to remove a number of daily events and product lines from our Zulily offerings, causing a meaningful sales impact,” president and CEO Mike George told investment analysts, according to a transcript provided by Seeking Alpha. “It’s too early to assess potential sales challenges at our other businesses, but we will continue to take actions as developments unfold.”

The TV shopping networks QVC and HSN are less affected, George said, because “we’re making decisions every day as to what items to script on the show, if an item is not available, we can go to something else. So in the short term, we see relatively limited sales impact.” He added, however, that “if some of our big, today’s special value or other really significant programs were to get materially delayed, we would unlikely be able to adjust enough to fully offset that pressure. But at this point, it’s a little too early to see that.”

Total Qurate Retail revenue decreased 5% year over year to $4.17 billion in Q4, down from $4.4 billion in Q4 2018. Revenue also decreased 4% year over year to $13.46 billion for the full-year 2019, down from $14.07 billion for full-year 2018. Ecommerce represented $2.6 billion, or 62%, of total revenue in the fourth quarter, and $8.0 billion, or 60%, of total revenue for 2019, as most views of the TV shopping shows turn to and to make their purchases.

Cord-cutting hits Qurate

The problem for Qurate is that fewer shoppers can see its TV shopping shows because a growing number of consumers are canceling their cable and subscription TV services in favor of streaming TV shows and movies via the internet. George said Qurate now reaches 80 million consumers through cable and satellite providers, down from a peak of 99 million. However, the company has partly offset that by making deals that allow it to reach 11 million households via streaming services and other forms of over-the-air distribution.


For Zulily, stiffer competition from the likes of Inc. (No. 1 in the 2019 Digital Commerce 360 Top 1000) and an array of startup online brands of women’s and children’s clothes have increased customer acquisition costs while cutting into sales. Qurate, which acquired Zulily in 2015 for $2.4 billion, wrote down $1 billion of the value of the online retailer last year while also laying off an undisclosed number of Zulily employees.

The $1 billion Zulily writedown was largely responsible for Qurate reporting a net loss for 2019 of $456 million compared with net income of $916 million in 2018. Excluding the Zulily write-off and other accounting adjustments, Qurate reported adjusted net income of $818 million for 2019.

The decline in revenue is closely tied to Qurate’s overall decline in customers in 2019, the company said. Existing customers—those who returned to make purchases—for QxH (QVC and HSN) declined 3% year over year in Q4 and 2% year over year for 2019; new customers were down 2% year over year in Q4 and down “slightly” year over year for 2019, George said. This is a reversal from 2018, when new customers grew 10% for QxH.

Qurate also absorbed higher fulfillment expenses in 2019 and Q4, including from opening its new 1.7 million-square-foot fulfillment center in Bethlehem, Pennsylvania, for its QVC and HSN businesses.

“We continue to make progress on our network optimization project, and we have begun shipping product from our new Northeast fulfillment center,” said Jeff David, chief financial officer for Qurate, on the earnings call. The company plans to counterbalance these pressures through “cost actions,” David said, without revealing specifics.


“Despite a disappointing year, we believe our platform is as relevant today as ever, with its enormous global scale, the unparalleled consumer reach with low marketing spend, the focus on highly curated product discoveries offered at compelling values with flexible payment options, immersive video-rich experiences and intense social engagement, all leading to astounding customer engagement and loyalty,” George said.

QxH reported:

  • Revenue decreased 3% year over year in both Q4 and 2019.
  • Ecommerce sales decreased 2% to $1.61 billion in Q4 from $1.65 billion in Q4 2018. Ecommerce sales decreased 1% in 2019 to $4.71 billion, down from $4.75 billion in 2018.
  • Ecommerce represented 66.7% of total revenue in Q4. Ecommerce sales represented 56.9% of total revenue in 2019.

QVC International reported:

  • Revenue increased 1% year over year in Q4 and grew 1.5% year over year in 2019.
  • Ecommerce sales rose 6% to $336.0 million in Q4, up from $316.0 million in the prior-year quarter. Ecommerce sales rose 6% in 2019 to $1.11 billion, up from $1.05 billion in 2018.
  • Ecommerce represented 43.4% of total revenue in Q4. Ecommerce represented 41.1% of total revenue in 2019.

Zulily reported:

  • Revenue decreased 18% year over year in Q4 and declined 14% year over year in 2019.
  • For online retailer Zulily, mobile sales represented 74.3% of its total revenue in Q4 and 74.4% of total revenue in 2019.

Cornerstone, a collection of direct-to-consumer brands including Garnett Hill and Ballard Designs, reported:

  • Revenue decreased 6% year over year in Q4 and declined 7% year over year in 2019. Cornerstone represented 7% of Quraate’s 2019 revenue.
  • Ecommerce sales declined 6% in Q4 to $190.0 million, down from $202.0 million in Q4 2018. Ecommerce sales declined 7% in 2019 to $655.0 million, down from $703.0 million in 2018.
  • Ecommerce represented 74.8% of total revenue in Q4. Ecommerce represented 72.7% of total revenue in 2019.

Qurate is No. 9 in the 2019 Digital Commerce 360 Top 1000.