QVC and Home Shopping Network will unify in a significant ecommerce merger to compete against firms like Amazon and Walmart as they take their business to mobile and digital consumers.
The company, in a $2 billion merger deal, will become the third largest online and mobile retailing platform in the United States and will be large enough to be offered on the S&P 500 stock index, Philly.com reports.
Over 62 percent of HSN will be purchased by QVC's parent, Liberty Interactive--a firm that already owns a portion of the popular television network dedicated to unloading billions of dollars in mail order products to viewers.
With QVC and HSN joining forces, the two firms will incorporate years of home-shopping experience and e-commerce to bring home a $14 billion concoction that would compete with large retail platforms, domestically and abroad.
QVC alone has around 8 million customers annually while HSN has around 5 million. Projections from both companies suspect that 2 million of those customers are active customers of both networks.
Given the potential for growth, both firms have experienced weakening sales in recent years due to very tight, brutal competition from Jeff Bezos' Amazon, specifically.
In this deal, Liberty Interactive will also be taking on millions of debt from HSN. About $500 million rounds of the total amount of debt HSN owes to creditors.
If the merger fails, both QVC and HSN could face harsher realities as their businesses may fail to bounce back from weak sales.
There was chatter of a merger between the two rivals in 1993; however, the merger was canceled.
According to a 2016 ranking of the top 25 U.S. e-commerce retailers prepared by WWD, Amazon was the top retailer with over 70 percent total revenue from e-commerce channels.
Walmart was a far second.
Both QVC, at #8, and HSN, at #19, were featured on the list as well for, respectively, 42.7 percent and 49.2 percent of total sales coming from e-commerce channels, as well.
Do you think the ecommerce merger between QVC and HSN offers more competition in retail? Leave a reply in the comments.
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