No ShopNBC Sale Coming; 4Q Results Seen Falling Sharply

   DOW JONES NEWSWIRES 
 

ShopNBC said will continue to try and stay in business after being unable to find a buyer as the television-shopping network promoted President Keith Stewart to chief executive and sees sharply weaker results for this quarter.

The company, owned and operated by ValueVision Media Inc. (VVTV), in September began reviewing its options as sales continued to sag. Its shares slumped 19% in early trading to 42 cents; the stock is down 92% the past year.

ShopNBC said Tuesday that while there was interest in buying or entering into other relationships with the company, no one submitted a final bid amid the market turmoil, woes in the retail industry and the possible redemption of convertible stock by General Electric Co. (GE). ShopNBC currently has to pay $44.3 million to GE this spring, and talks to extend and restructure the deal are ongoing.

At the same time, the board considered liquidating the company and distribution assets to shareholders. But a board committee determined shareholders would likely not see anything from a liquidation.

So, the company is enacting new strategies, including cutting its cable- and satellite-transmission fees, which may reduce the number of homes the network is currently seen in, while Chairman John Buck gives up day-to-day control of the company. ShopNBC is available in 72 million homes and the transmission fees make up half of the company's operating expenses.

Meanwhile, ShopNBC projected fiscal fourth-quarter revenue at about $142 million, down 35%, amid lower average selling prices. The net loss for the quarter ending this week is expected to balloon to $40 million from $1 million. The company cut 11% of its salaried work force during the quarter; it had about 850 employees in total.

In addition, inventory is down 35%.

-By Kevin Kingsbury, Dow Jones Newswires; 201-938-2136; [e-mail]

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary. You can use this link on the day this article is published and the following day.