QVC and HSN File for Bankruptcy amid TikTok Shopping Shift
QVC Group, the parent company of home television brands HSN and QVC, will file for Chapter 11 bankruptcy protection.
The company disclosed the plan in a filing with the Securities and Exchange Commission.
“As of the date of the Petition, we intend to operate our businesses as a debtor-in-possession under the jurisdiction of the Bankruptcy Court in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court,” the filing states. “QVC Group and QVC, Inc. intend to seek bankruptcy court approval for a variety of ‘day one’ motions to continue our ordinary course operations during the Chapter 11 cases. Although no assurance can be given as to a potential emergence date, QVC Group is targeting an exit from the Chapter 11 cases within approximately 90 days.”
The details of the bankruptcy are yet to be determined, although Chapter 11 allows a business to continue operating while it is being restructured.
QVC states that “the Company has sufficient liquidity to support the business and, importantly, the terms of the RSA provide that vendors, suppliers and all other general unsecured creditors of the filing entities must be paid in full for all goods and services. There are no layoffs or furloughs planned as part of the financial restructuring process, and all team members should expect to continue to receive their salaries and benefits without interruption.”
A year ago, the company laid off 900 employees as it consolidated operations and prepared a transition to live shopping on social platforms like TikTok, which have become the next generation’s home for this type of content.
“Linear television is a very attractive and profitable platform and remains our cornerstone. However, as traditional television declines and the mix of video platforms captures more of customer attention, we must accelerate our expansion beyond television to find growth,” the company said at the time.
Platforms like TikTok Shop and shopping creators on YouTube and Instagram have stolen much of the spotlight, helped by cheap products that can be shipped from Asia and other markets.
The company also has other content deals for programs that could complement its buy-side deals, such as a deal to broadcast pickleball games.
“QVC Group is uniquely positioned to compete and win in live social shopping, and we are seeing early momentum in our WIN growth strategy,” said David Rawlinson, president and CEO of QVC Group. “Over the past year, we have become a top seller on TikTok Shop US while growing our business across streaming and other platforms. We have consolidated our HSN and QVC operations, entered into new agreements with critical social and media partners, and rebalanced sourcing to account for the changing pricing environment. With the support of our lenders and a more appropriate capital structure, we believe we can execute on our WIN growth strategy.”
Yet the bankruptcy marks the end of an era for one of the most powerful brands of the cable TV generation.
QVC Group is part of cable mogul John Malone’s media empire, with the billionaire purchasing the brand for $7.9 billion in 2003 and then folding into Home Shopping Network in 2017.
