WWDMILESTONES SECTION II

The Accessories Array

The Digital Future

Celebrity Casting HSN at 35

HSN has come a long way from an AM radio show to a home shopping channel to a multimedia powerhouse that reached sales of $3.18 billion last year. It encompasses and embraces a range of formats — from social media and e-commerce to m-commerce and social gamification — under the direction of chief executive officer Mindy Grossman.

PHOTO BY BOB KROSLIN PHOTO BY The Beauty Bonanza 2 WWD FRIDAY, AUGUST 24, 2012

SECTION II WWD.COM

WWDMILESTONES Mindy Grossman: Game Changer

building the pipeline in every one By MARC KARIMZADEH of the categories and redefine what authority meant in those categories, Mindy Grossman made an unexpected whether it was beauty or culinary,

— though symbolic — move in her first fashion or electronics.” week on the job at HSN Inc. She diversified the portfolio, amp- “I tore down every parking sign that ing up the fashion and beauty catego- JOHN AQUINO PHOTO BY said ‘vendor’ and changed it to ‘part- ries and bringing in well-known names ner,’” Grossman recalled. “It was in- in the kitchen and food area. Her crite- dicative of the type of culture that we ria was the same for each.

wanted to have.” “The first thing is great product,” That was May 2006. Six years on she said. “Is it relevant? Is it differen- and the chief executive officer has tiated? Is it something that can strike done more than just update the park- a chord? If you don’t have the ability ing lot at HSN’s St. Petersburg, Fla., to talk about this for at least seven headquarters. Grossman successfully minutes and make it exciting and revamped HSN from the ground up, compelling, it doesn’t·· belong in our not just giving the corporate culture a environment. It’s great product, great jolt, but also transforming the network story and great storytelling.” from a cacophonous home-shopping As if to drive home the message, channel into a dynamic, multimedia she picked up a candle from the coffee destination that melds commerce with table and exclaimed, “You could talk entertainment. about a scented candle for eight hours These days, HSN features designers if you were passionate about it.” like Mark Badgley and James Mischka Her formula has proven a hit. In of Badgley Mischka, Rachel Roy and 2008, HSN Inc. was spun off from IAC, Naeem Khan, alongside celebrities and today, it’s a stand-alone, publicly such as , Iman, Queen traded, $3 billion multichannel retail- Latifah and Mary J. Blige, who choose the network to offer a fragrance, ap- parel or, as is the case for recent ad- dition Randy Jackson, a watch line. We all expected Performers like Lionel Richie and Rod Stewart have used the network to launch and sell their latest CDs, re- changes [from plete with a televised performance in front of a live audience. Mindy]...What we “It’s about contextual commerce, something that’s going to create a con- got was the ultimate, nection with the customer because it either has a provenance or a story or anything else,” said Grossman, sitting supersparkling in HSN’s modernist New York offices high above Midtown Manhattan. makeover. The executive had a specific vi- sion of what she wanted the network — RICHARD GRAZIANO, to be when she joined. R.J. GRAZIANO “Even before I met with [chairman and senior execu- tive of IAC/InterActiveCorp] — at the time we were owned by IAC, so I was er. Even with her success, Grossman’s hired by Barry — I had in my head not one to rest on her laurels. what I thought the business could “Today, you have to have more than evolve to,” she said. “I looked at it just a transactional mentality,” she said. much less as a retail venue and much “We want to really understand as much more as an information/entertain- as we can about our customer so we ment/lifestyle venue, and that was can give her content and products and really the genesis of what I felt the experiences that are very aligned with transformation could be.” what’s going to make her life better.” It’s hardly a surprise that Grossman More recently, the·· evolution of the felt so strongly about the need to tell Internet has given the strategy a sig- Mindy Grossman stories beyond selling merchandise. nificant boost. Prior to joining HSN, she made her “Today, we can leverage that con- mark at Nike, where she was global tent across every screen that we vice president of apparel, and, before have,” Grossman said. “We have the tient beyond the red carpet into ev- The evolution continues and that, headed up Polo Jeans. Those ex- capabilities because we’re a televi- eryday life. Grossman is brimming with ideas for periences polished her strong sense sion network to create original con- “We didn’t know what to expect,” re- HSN Inc., the network’s parent. for fashion and merchandising, and tent that’s only available digitally to called Mischka. “We went from Tampa, “We’ve made decisions to divest of Grossman relied on them when, in the enhance what we do. If you look at our where the show was shot, to Palm some businesses, like a Smith & Noble summer of 2007, she presented a com- iPad application, you can customize Beach, and people there started rec- [home interiors firm], and you’ll see plete overhaul of HSN from cool new your own channel. If I like cooking, I ognizing us. It has such a reach, which some of that,” she said. “We made our graphics to fresh new sets and a widely can create Mindy’s cooking channel, was really surprising to us.” first acquisition of Chasing Fireflies in enhanced .com. and every time a cooking video comes Mischka first met Grossman nearly the children’s space because it lines “What’s fascinating is that prior to out, it comes into my channel. You three decades ago, when she headed up with this aspirational family life- August 2007, we didn’t have a single were never able to do that.” men’s sales for Williwear Willi Smith style. There’s potentially technology video on our Web site,” she said. “It Vince Camuto, who sells shoes, ac- and he was head of men’s design. businesses that will enable us to do was basically a digital experience cessories and fragrance on the net- “Her capacity is amazing,” Mischka more content or different things. There of what didn’t sell on television. We work, called Grossman “a true innova- said. “The word ‘no’ doesn’t exist with are things in what I call the ‘gamifica- weren’t even maximizing the fact that tor in the business.” her. She looks at everything from a tion’ world, married to social media, we could have this network amplifica- “She has already achieved tremen- fresh point of view. She doesn’t look at that could be very interesting and tion, but we also didn’t have the con- dous success with HSN and has po- it from just a tried-and-true merchant- would enable us to do new things.” tent to really leverage it.” sitioned the brand for multichannel vendor relationship. She has a wide She called this “the most exciting So, simultaneously with the re- growth through significant investments reach of looking at things, which we time in the history of our company.” launch, Grossman embarked on a mis- in the digital space and a fresh approach find very useful and very refreshing.” “We’ve fixed the fundamental sion to reevaluate the vendor matrix, to product and partnerships,” he said. Richard Graziano of jewelry firm foundation, we have a strategy that’s nixing some existing brands and busi- Badgley Mischka offers the R.J. Graziano said, “We all expected working and we’re in an environment nesses that didn’t fit in with her new American Glamour Badgley Mischka changes when Mindy first started. where technology is enabling us to be strategy and bringing in new ones. As line on the network, which aims to What we got was the ultimate, super- so much more than we could ever be,” she put it, the strategy was to “start translate the brand’s glamour quo- sparkling makeover.” Grossman added.

4 WWD FRIDAY, AUGUST 24, 2012

SECTION II WWD.COM

WWDMILESTONES From AM Radio to Multimedia Mecca ping channel, TV Macy’s. It was backed invent HSN in 2007 with new sets, and wardrobe styling for on-air hosts. By SHARON EDELSON by network and cable veterans such as graphics and on-air presentations, as “There’s been a growth in sales, even the late Don Hewitt, then executive well as an updated hsn.com. He’s now when the world went through this hor- Saying that HSN has come a long way producer of “60 Minutes,” and Charles in the throes of retooling the network rible downturn.” since its founding in 1977 would be a Dolan, chairman of Cablevision once again. HSN has become adept at integrat- gross understatement. Systems Corp. But it was short-lived. “We are completely omnichan- ing new movies into its programming. HSN was born as a fluke when an By 1995, Macy’s parent, Federated nel,” said Sheldon, who is now work- For “Snow White and the Huntsman,” advertiser on a Clearwater, Fla., AM Department Stores Inc., had pulled the ing on “the integration of social media HSN created a product collection radio station couldn’t pay his bill. The plug on the channel. Another channel, into the HSN mobile app. Already, around the film starring Kristen station owner accepted 112 electric Fingerhut’s S The Shopping Network, you can watch a high-definition feed Stewart that included jewelry by Loree can openers in lieu of cash, which he was canceled in 1994 shortly before its of HSN on every platform. Now, you Rodkin and RK by Ranjana Khan, bed- promptly auctioned over the can chat while ding by Hutton Wilkinson and peasant air. The can openers sold out you’re watching. dresses by Colleen Atwood. “It was an and led to a regularly sched- The HSN host unbelievable immersive experience. It uled shopping show, “Suncoast is able to see was very successful,” Sheldon said. Bargaineers.” The concept those chats and Another new programming wrin- in 1981 moved to local access can say, ‘So and kle is HSN Live Music events, which cable in the Tampa area as so has a ques- have featured Mary J. Blige, Lionel “Home Shopping Channel.” It tion about…’ It’s Richie, Tony Bennett and Natalie graduated the following year becoming this Cole. The concerts are performed in to a regular local Tampa area entire full circle front of small audiences, then posted cable system. Home Shopping of integration. on Facebook. The musicians have fra- Channel launched nation- During some grances or CDs to sell, but the pitch is wide as Home Shopping Club, shows we’ll have cloaked in entertainment. broadcasting 24 hours a day on a Twitter feed Fashion has been growing and cable and local TV. From there, running on air. gaining acceptance since Stefani Home Shopping Network Home Shopping “We’re about Greenfield, cofounder of Scoop and began attracting attention. Channel came to launch a now chief creative officer of Jones It went public in 1986 on the about in 1981. media lounge New York, appeared in 2007 on HSN’s American Stock Exchange, within the TV “Scoop Style.” sold a controlling interest to Liberty planned launch. studios,” Sheldon said. “It will be a “That was the turning point for us,” Media in 1993, and caught the fancy Diane von Furstenberg, Diller’s space where a guest Sheldon said. “We were of Barry Diller, former chairman of wife, was one of the first well-known can use all the social able to shoot it and light Fox Inc., who in 1995 acquired HSN designers to try home shopping. She touch points before it and execute against it. and became its chairman. He is now recalled her first brush with the venue or after they go on the Other designers saw it.” chairman and senior executive of IAC/ in November 1992: she sold $1.2 mil- air. We’ll say, ‘Queen Designers and brands InterActiveCorp. HSN was completely lion worth of her Silk Assets collection [Latifah] is now in the such as American spun off from IAC in 2008. during a two-hour appearance on QVC. media lounge. She’s on Glamour Badgley Mischka, HSN isn’t the only player in the The experience was redemptive. Facebook if you want to Label Rachel Roy, Lela field. QVC was founded in 1986 by “It’s not what the clothes were talk to her.’” Rose for HSN and Twiggy Joseph Segel in West Chester, Pa. QVC about,” she said at the time, “but it Prior to the 2007 London “feel that we un- in 1989 acquired its top competitor at gave me a sense of security. I went makeover, HSN hosts derstand fashion and we the time, the Cable Value Network. from has-been to pioneer again.” “used to grab your hand understand styling now. Diller in 1992 purchased a $25 mil- Von Furstenberg in 1996 left QVC and take you to the We are shooting fashion lion stake in QVC. In 1995, Comcast and signed with HSN. “The whole till before we told you in various cities and put- purchased a majority stake in QVC, home shopping experience was the what the product was,” ting huge [ad] campaigns taking control of the corporation. That beginning of interaction between Sheldon said. “Early in together. We’re putting sig- was the year Diller left QVC to buy consumers and the screen,” von the changes, I tried to Andrew nificant dollars behind fall HSN. Meanwhile, Comcast in 2003 sold Furstenberg told WWD. “I was very create a format where Sheldon and spring fashion.” its majority share in QVC to Liberty lucky that Barry and I had that experi- the host and guest would Sheldon still has a lot Media. ence.…It was an amazing experience.” sit on a sofa and talk BOB CROSLIN PHOTO BY on his plate, including the Other home shopping networks HSN, which had been through about the product. We relaunch of hsn.com in the emerged in the early Nineties, but few several incarnations, would undergo sit much more when we’re present- first quarter. gained much traction, leaving HSN, a a major overhaul, with the appoint- ing than we’ve ever done. There’s no “It’s going to become a very immer- $3 billion multichannel retailer, and ment of Mindy Grossman as chief ex- reason why our food shows can’t be sive, story-telling experience,” he said. QVC, which generated $8.3 billion in ecutive officer in 2006. like the Food Network and our home “We did recent photo shoots for fash- annual sales in 2011, to battle for cus- Andrew Sheldon, executive vice shows like HGTV. We have seen contin- ion and beauty in New York because tomers and brands. Macy’s in 1993 said president of television, live events ual growth since we made the [initial] that’s where the models are that we it was launching a 24-hour home shop- and creative, helped Grossman re- changes” that included new hairstyles want to use.” Timeline

1977: HSN is 1995: Barry Diller buys founded with 112 the Home Shopping electric can openers Network and becomes its that are sold on a chairman. Clearwater, Fla., 1999: Home Shopping radio station, Network acquires prompting “Suncoast Ingenious Designs and Bargaineers,” hsn.com launches. a regular radio 2000: Home Shopping program. Network becomes HSN. 1981: The concept 2001: HSN purchases expands into local the Improvements brand Tampa Bay cable as catalogue and Web site the Home Shopping from Hanover Direct Inc. Channel. 2005: HSN acquires 1985: The Home leading catalogue Shopping Channel and online retailer launches nationwide WHALEN KRISTEN SOMODY PHOTO BY Cornerstone Brands and Barry Diller as Home Shopping its portfolio of brands Club with 24-hour programming. like Ballard Designs, Frontgate, 1986: The Home Shopping Network Garnet Hill, Grandin Road and starts trading on the American Stock TravelSmith. Exchange. 2006: Mindy Grossman joins HSN as The Home 1993: Liberty Media buys a controlling chief executive officer. Shopping Club studio in 1983. stake in the Home Shopping Network. {Continued on page 6}

6 WWD FRIDAY, AUGUST 24, 2012

SECTION II WWD.COM

WWDMILESTONES Staying Ahead of the Financial Curve was right — HSN was ready record. They have a very good By EVAN CLARK to thrive. understanding of who their Judy Schmeling. The company used the flex- customer is. That sounds like HSN Inc., the retailer that’s ibility of its business model, retailing 101, but not every- been as close as the TV re- which is devoid of the shelf body does a good job of that. mote control since 1994, had space brick-and-mortar retail- They understand their cus- the most unlucky of starts on ers need to constantly fill, and tomer and I think the custom- BOB CROSLIN PHOTO BY Wall Street. pivoted to what suddenly stay- er trusts HSN.” Barry Diller was looking at-home consumers wanted: Perhaps that’s because, to simplify IAC/InterActive more gear for cooking, not as just as shoppers watch HSN, Corp. in late 2007 and much apparel or jewelry. HSN watches them back. deemed HSN ready to “thrive That flexibility helped “We gather feedback from as a ‘pure play’ retailer.’” fuel the company. Last year, our customer; we measure But when IAC spun off the net profits rose to $123.1 mil- our business by minutes,” said home-shopping business, lion on sales of $3.18 billion. Judy Schmeling, executive as well as Ticketmaster and The stock topped $45 this vice president and chief finan- LendingTree, that following month — a fourfold increase cial officer, who joined HSN August, few guessed the mar- in four years. the year it was founded. ket was just weeks away from “It’s difficult to argue with Segment producers are financial crisis. the numbers,” said Scott Tuhy, used to thinking on their feet, Shares of HSN start- a debt analyst at Moody’s and when customers aren’t ed out at $11 and within Investors Service. “Since calling in to buy, they adjust. months slumped as low as Mindy [Grossman, chief ex- “If we see that a product is $1.40 as investors sought to ecutive officer] came and they not moving as quickly as we’d find their footing. became a public company, like, we move on to the next It turns out that Diller they’ve had a very solid track product,” Schmeling said. There’s an art and a sci- ence to selling on TV, though. “You need a great product, first of all,” Schmeling said. “It has to have a great story and it has to have a great sto- ryteller — someone who has a connection to that product, a reason for being. The cus- crease penetration. are spending less time in tomer can tell if this is just Even so, HSN does not front of their TVs and more a celebrity up there trying have that consumer to them- time on their iPads. As their to sell something they didn’t selves. Larger rival QVC is customers, and customers in have an affinity for.” also gunning for those same general, migrate online, they Schmeling pointed to shoppers, and the company need to have a compelling tennis star-turned-fashion doesn’t lack for competi- online attraction.” player Serena Williams as tion in its other businesses. The firm is trying to do just an HSN presenter with the There’s Cornerstone, which that with HSN Arcade, a gam- right passion and chops to ships more than 300 million ing Web site that launched connect with the consumer catalogues annually, and last year and lets users play on the small screen. hsn.com, which is going toe- versions of poker, solitaire And there are still more to-toe with a multitude of and mahjong while being potential consumers out e-commerce and brick-and- tempted to shop. there with whom to connect. mortar retailers. While Schmeling said it’s HSN broadcasts to 95.5 mil- “Digital is [HSN’s] big- still too early to say exactly lion of the roughly 114.6 mil- gest threat and their biggest how many sales dollars the lion U.S. homes with a TV. opportunity,” Moody’s Tuhy arcade has added, she noted But Schmeling said HSN has said. “Most everything they that the video game player was 4.7 million customers and so sell, it’s not also at Macy’s, “definitely buying from us” — plenty of opportunities to in- it’s also at Amazon. People and that’s the whole point.

Lionel Richie in Timeline the studio. {Continued from page 4} Pictures to support “Eat Pray 2006: HSN introduces HSN Shop Rod Stewart Love” with 72 hours of special by Remote. in 2010. programming around the movie. 2007: HSN is relaunched with 2011: HSN sells merchandise new sets, graphics and on-air inspired by such movies as “The presentations, as well as a Help” and “Footloose.” revamped hsn.com. 2011: HSN launches retail’s 2008: HSN adds social networking first casual gaming and digital with MySpace and Facebook pages. entertainment portal called HSN 2008: The network enters a Arcade, combining shopping, partnership with Condé Nast that gaming and sharing. kicks off with “Shop With Lucky” 2011: Joy Mangano sells her 350 shows. millionth huggable hanger, the 2008: HSNi spins off from its most successful HSN product ever parent IAC and begins trading on and Diane Gilman sells 200,000 the Nasdaq Global Select Market. pairs of jeans in one day. 2009: HSN’s Shop App launches 2012: HSN partners with HBO and HSN and Verizon FiOS for a licensed beauty and home introduce the HSN Shop by collection called Forsaken that is Remote widget. inspired by the HBO show “True 2010: HSN adds HSN2 on the Blood.” DISH Network with an encore of 2012: HSN teams with Universal HSN shows, products, brands and Pictures’ “Snow White and the personalities. Huntsman” and sells exclusive 2010: Rod Stewart’s “Fly Me to the products inspired by the movie. Moon” debuts during a one-hour 2012: Lionel Richie’s live- concert event, selling 25,000 CDs streamed concept sells more than in one hour, while Mary J. Blige 20,000 CDs in just one hour; NoNo sells 61,000 units of her My Life sells out of 40,000 units of its fragrance in six hours. innovative hair removal system in 2010: HSN partners with Sony 12 hours.

8 WWD FRIDAY, AUGUST 24, 2012

SECTION II WWD.COM

WWDMILESTONES Expanding the Digital Array using the medium don’t have ing river of conversation that By RACHEL STRUGATZ too much time. Jill Braff brings commerce to life.” “In digital, getting [per- In January, HSN partnered HSN IS KEYED UP about mobile commerce. formance] metrics to be posi- with technology provider Intel The channel is the fastest-growing online busi- tive equates to sales because, for HSN Touchwall, an inter- ness for the 35-year-old company, with m-commerce frankly, if she comes and has active program designed to sales for the first half of 2012 eclipsing the $65 mil- a problem, not only will she expand the reach with consum- lion the network took in all of last year. HSN is on leave, but she won’t come ers beyond TV and the Internet track to more than double this number by yearend, back,” Braff said. through a collaboration with according to Jill Braff, executive vice president of The executive said that chef Wolfgang Puck. Users were digital commerce at HSN. e-commerce has been instru- able to engage by creating their “Mobile really takes advantage of a few behav- mental to HSN’s digital strat- own virtual pizzas using Puck’s iors,” Braff said. “We know we have a core consumer egy since it launched its online signature products, and each who watches us on TV, and she has mobile devices shopping channel at hsn.com received an e-mail or text on such as her phone and tablet, and we can create a in 1999, turning a profit within their mobile device following two-screen scenario that brings her into the show in three months. Currently, HSN the experience with a shopping a different way.” sees between six and eight list and links to order the ingre- Shoppers who interact across several channels million unique visits a month. dients online. spend upward of 50 percent more than a single-chan- Electronics is the most popular Most recently, HSN and nel customer. Braff said their spending averages from category for e-commerce, but HBO unleashed a highly in- $700 to $800 a year, but can jump up to $1,300 for the Braff contends that, judging by tegrated partnership sur- consumer who engages across several mediums. “Her Hub” — its beauty, fash- rounding the launch of the “She’s also doing product research, as well, and ion, accessories and retail por- Forsaken collection, inspired for the consumers who may not be TV watchers, [we tion — it’s the jewelry category by the cable network’s show

asked ourselves] how do we make that experience that reigns as the bestseller. BOB CROSLIN PHOTO BY “True Blood.” The selection of Sales from e-com- beauty products ranges from merce at hsn.com in Deborah Lippmann’s Sookie 2011 constituted 34 percent of HSN’s total Sookie nail polish to a D.L. & Co. candle with a fang sales and the company has seen 8 percent lid. The campaign included teaser promos, viral vid- growth on this channel in 2012 to date. eos from the “Human Shopping Network” and “True E-commerce has grown 65 percent in the Blood” trivia and social chats with members of the past five years, according to Braff, who at- show’s production team. Braff revealed that the tributes its success to the merging of com- monthlong social campaign had 89.3 million impres- merce and content, a focus for the retailer sions, 261,658 engaged users, 58,348 fans gained and since its inception. more than 100,000 video views. “[We’ve been bringing] this to life every A series of All Access Birthday chats kicked off on day through TV for the past 35 years, and now Facebook July 1 in honor of HSN’s 35th birthday. The we’re looking at digital and how the consumer retailer tapped celebrities such as Rachel Roy, Randy is changing. We see a great opportunity to real- Jackson, Nate Berkus and Iman to foster engagement ly leverage the assets of the network, the same on the network’s social and mobile channels through assets that have always made us,” said Braff, live chats on Facebook. citing entertainment, commerce, content and From Sunday through Sept. 22, HSN will launch its community. “We have always had a thriving fall collections with an elaborate multiplatform com- commerce business, and this [further] comes merce experience called the Ultimate Trunk Show, in to life through e-commerce, whether shoppers partnership with Elle magazine. Industry tastemak- The HSN Arcade homepage. are helping other shoppers or even live chat- ers will star in “how-to” videos spanning the fashion, ting with one another. There are many more really rich when we think about mobile? We’re fo- ways for our community to help each other and con- cused on this multichannel shopping behavior when nect to us through these digital platforms.” consumers interact with us,” she said. But mobile and e-commerce aren’t just about the As a result, HSN has built its mobile-centric prod- transaction; they are also an engagement vehicle ucts around shoppers’ behavior. Braff explained that HSN leverages through its presence on various that this consumer tends to be more of a hunter, and social media platforms. It entered the space in 2008 since she has less time on mobile, the retailer has with MySpace and Facebook pages (it’s been active begun to supply her with mobile recommendations on YouTube since 2007), and a year later unveiled related to items she may be “hunting” to give her its first iPhone app, the HSN Shop App, which gave more impulse buying or flash-sale opportunities. consumers access to shop on three screens: TV, online Mobile also serves as a leading new customer through its digital flagship and via mobile device. In acquisition channel, which means HSN must think 2010, HSN came out with iPad and Android apps, as about how to make this experience as seamless as well as HSN Mobile. In 2011, QR codes were integrat- possible across screens, whether it’s video on de- ed on TV to drive mobile sales and, in June of that mand, streaming live broadcasts or a chat. Braff said year, digital gaming platform HSN Arcade launched. if a user is on hsn.com and places a product in her Social gamification is shaping up to be a major cart, she should be able to have one cart on all chan- focus for retailers and brands online, and in the 14 nels. She can start a purchase on one screen and months since HSN welded shopping, gaming and then complete the transaction on another. Focusing sharing in the free, 26-game arcade, it has seen an HSN’s Facebook page. on performance here is paramount, as most people astounding 69 million game plays. Of the games, the Today’s Special jigsaw puzzle, based jewelry, accessories and beauty worlds showing con- on HSN’s “Today’s Special,” is the sumers their latest collections and must-haves for the most popular, according to Braff, upcoming season. The videos will live on hsn.com, who calls the “casual gaming portal” HSN mobile and social platforms such as Facebook, an “incredible engagement tool.” As Twitter, Instagram, YouTube and Pinterest. soon as the day’s special launches “Digital is a very important driver of our over- at midnight, a jpeg of the item is re- all business strategy as we work to provide con- leased for participants and the per- tent-rich experiences across all of our platforms son who completes the puzzle in the that engage and inspire consumers,” said Mindy fastest time wins the item. Grossman, chief executive officer of HSN Inc. “We “We want to be a poster child for are committed to giving our customers the oppor- social media and commerce, and tunity to experience HSN on her terms, whenever we believe that our customer is so and wherever she chooses.…Our digital dress shop primed for social because she’s and House Beautiful Marketplace initiatives are very loyal and has a lot to say,” she recent examples of digital-first strategies that have said. “We folded social into the allowed us to apply what we’ve learned online to whole HSN network, and the biggest our on-air programming and elevate the HSN shop- change with digital here is that we ping experience overall. Our goal is for her to want recognize that the consumer is in to interact with us every day — not just when she the middle with all of these screens wants to shop, but when she wants ideas, informa- HSN’s “True Blood”-inspired Forsaken collection that came out Aug. 9. around her. It becomes the underly- tion, relaxation or entertainment.” ... you don’t look a day over 30 ...

Happy th 35 Birthday

Number 1 in beauty on Helping 96 million American households look years younger 10 WWD FRIDAY, AUGUST 24, 2012

SECTION II WWD.COM

WWDMILESTONES Accessories Tell a Story

By ALEXANDRA STEIGRAD

WITH THE ADDITION of more exclusive fashion- forward accessories to its product mix, HSN has A necklace from Amedeo NYC. slowly changed how the industry views its business strategy and its customer, according to Bill Brand, executive vice president of programming, marketing and business development. “When it comes to the product, it’s about being A snakeskin on trend. It’s about our merchants creating prod- print bag from uct that hits our sweet spot,” he said, emphasiz- Iris Apfel. ing the accessories and footwear categories as a standard bearer for HSN’s growth. “When it comes to accessories, over the past three years, you’ve seen more national brands.” Beamed into 96 million homes across the U.S. with live-streaming segments available on its Web and digital sites, HSN has shrugged off the stigma of a shopping channel for dowdy couch potatoes and emerged as one of retail’s most in- novative multiplatform companies by luring in well-known designers and brand ambassadors. In recent years, HSN has fueled its growth by adding popular names such as Badgley Mischka, Naeem Khan, Iris Apfel, Sam Edelman, Vince Camuto, Carlos Falchi, , Serena Williams, Iman and Twiggy. Designers-turned-celebrities, celebrities- turned-designers — and everything in be- tween — flock to HSN’s home base in St. vendors develop the right product for its customer Petersburg, Fla., to sell their wares, most of and it also acts as a sort of mentor through the sell- which are exclusive to HSN, in their own TV ing process. studio. Brands are selected by HSN based on “What I like about HSN is that as a partner, selling power and the strength of the brand’s you count. As a physical person, you are vital to story. In most cases, this means designers, brand the outcome and everyone is behind you,” said ambassadors and founders had better be good at con- “When we look at designers in footwear, we try to Scognamiglio. “HSN has the most discerning cus- necting with viewers at home. understand their relevance as well as who our target tomers there is. When you’re on TV, you are not look- “Great product is the price of entry, but you have audience is,” Bosco noted. “We are looking to broad- ing at them, they are looking at you and they can tell to have a great story and be a great storyteller,” said en the assortment when it comes to digital. That’s who’s a fraud.” Brand, explaining that “creating a relationship” where most of the variety is being added.” As a member of HSN’s stable of brands, Amedeo with the consumer is how HSN keeps customers With the addition of its Web site in the last 13 NYC must pump out nine collections a year, and coming back. years and a dynamic digital platform within the last appear on TV nine times a year to sell them. Each “HSN is about staying current. You have to be six, HSN has had a larger opportunity to grow its collection takes about four months to produce, flexible and collaborative,” he added. “Accessories stable of brands. This includes building out jewelry, which means Amedeo is constantly working on is a high-growth category and it’s a loyalty driver.” which is the firm’s second-biggest priority in acces- something for HSN. As a result, HSN has put a lot of thought into sories behind footwear, according to Bosco. bringing in jewelry, handbags and footwear that are Jewelry, which emphasizes trends more than trendy yet affordable. national brands less and trends more, is anchored For footwear, the company’s fastest-growing cate- by the strength of Rarities, a fine jewelry collection gory within accessories over the last three years, the by Carol Brodie. While Rarities isn’t fine jewelry focus continues to be on attracting national brands, in the traditional sense — its core offering hovers according to John Bosco, HSN’s senior vice presi- around $249 — the brand does offer higher-priced dent of merchandising. styles that hit $2,500. Earrings from “In the footwear business, you Like most of the other HSN brands, Rarities uses Rarities, a need recognizable brands,” he classic designs found in fine jewelry and replicates fine jewelry said, pointing to the recent ad- them in more affordable materials including stones collection by ditions of Vince Camuto, Steve such as white topaz, cubic zirconia, peridot, amethyst Carol Brodie. Madden and Sam Edelman. and turquoise, and metals such as sterling silver, ver- “The customer wants the hot- meil, stainless steel, black rhodium and 10- and test trends.” 14-karat gold. With an offering rang- For HSN, the challenge in jewelry is ing from $99 up to $299, maintaining the balance between design HSN has not only in- and quality. creased the number “It has to be [about] designers [custom- of brands it car- ers] know and bringing those designs to con- ries, but it has also sumers at an accessible price point,” Bosco worked on get- said. “That’s the kind of stuff where credibility ting exclusive and aspirational quality come into play.” product from The same holds true for handbags, Bosco those brands. explained. The more aspirational designs must be evocative of the designer’s higher-priced collection at a more affordable price. For exam- ple, Carlos Falchi, who is relaunching his brand with new partner Li & Fung in September, will offer a collection of bags for HSN. Known for his quality work with exotic skins, the HSN line will replicate his signature looks in treated leather But that’s fine with Scognamiglio, who is also co- to keep the price attainable. founder and co-ceo of fashion-forward fine jewelry “HSN is a true partner. They help fi- brand Faraone Mennella. According to the design- nance the shows. They are correct in terms er, when he started with HSN, his fashion friends of payment, and they have the most ex- told him selling on TV would “tarnish” his brand. perienced buyers in the world who plan Now those same people are asking him how they to sell out completely and they do,” said can get on HSN. Amedeo Scognamiglio, founder and chief “When you sell 1,000 units of jewelry at once and Vince Camuto’s executive officer of Amedeo, an Italian [HSN producers] are screaming for more, it’s an studded leather brand that has been selling its cameo-cen- amazing feeling,” he said. “Designers love fashion pump. tric jewelry on HSN for 10 years. shows, but the ultimate satisfaction is when you sell According to Scognamiglio, HSN helps its a product and when people buy a product.” CONGRATULATES HSN ON 35 YEARS OF INDUSTRY EXCELLENCE 12 WWD FRIDAY, AUGUST 24, 2012

SECTION II WWD.COM

WWDMILESTONES Creating a Beauty Bonanza Olum, who added that HSN’s Web site, on which a By BELISA SILVA “significant portion of the beauty business” is con- ducted, offers customer reviews and expert blogs “HOW DO YOU SELL 60,000 bottles of fragrance in a across all categories. For beauty, HSN also uploads day when no one has smelled it?” asked HSN’s gen- how-to videos, which exist also on HSN’s mobile, eral manager of beauty and merchandising, Betsy Facebook, Twitter, Instagram, YouTube and Pintrest Olum. The answer is: “You tell a story.” pages, with tips from industry insiders like David In the beauty business for over 20 years, HSN has Evangelista and Sally Hershberger. transformed itself from a relatively undeveloped “We want our customers to fall in love with our beauty retailer with a handful of proprietary brands products twice — when they purchase and then again to a robust venue for more than 60 — across the when they receive it,” said Olum. “In terms of being color cosmetics, skin care, hair care, nail care, beau- truthful, we have to ensure we are true to both the ty tools, bath and body and fragrance categories. consumer and the HSN brand at all times. That is how “It’s hard to believe that only six years ago 70 per- we earn trust and continue to evolve our business.” cent of our air time was dedicated to four propri- etary beauty brands,” said Olum, who named some Sean “Diddy” Combs on HSN promoting of HSN’s current best-selling brands as Serious his scent I am King — which he sold out Skin Care, Perlier, Signature Club A and Your Best of in an hour — in November 2009. Friend, which are all exclusive to the network, as Cornerstone Takes well as Lancôme, Shiseido, Wei East, Boscia, Carol’s Daughter and Benefit. “Things have changed dra- acquainted and intimate with the person who works Lifestyle Approach matically over the past six years.” on the brand and how to use it,” said Olum. “It’s al- Although prior to the millennium, the direct-sell most like your best girlfriend letting you in on the HSN acquired catalogue and online retailer TV channel hadn’t historically been the first choice for secrets of the industry.” Cornerstone Brands in 2005. beauty brands, Olum said once chief executive officer With names like , Kate Walsh and Cornerstone comprises leading home and ap- Mindy Grossman — who took the helm in 2006 — un- Nicole “Snooki” Polizzi from “Jersey Shore” also on parel lifestyle brands Ballard Designs, Chasing veiled her strategy for the network, things began to shift. HSN’s beauty roster, it’s clear the network has plen- Fireflies, Frontgate, Garnet Hill, Grandin Road, “Mindy’s vision was that HSN would not just be ty of personalities to fill the airwaves — sometimes Improvements and TravelSmith. More than a shopping channel, but an opportunity to provide with unexpected results. half of Cornerstone’s revenue comes from its e- entertainment and community,” said Olum, who “With live TV 24-7 you never know what to expect,” commerce sites, according to the HSN Web site. added that part of HSN’s updated trajectory in- said Olum, who named a few stand out on-air mo- Cornerstone operates separate e-commerce sites, cluded bringing onboard harder-to-find prestige and ments, including an impromptu dance break with J.Lo distributes more than 300 million catalogues an- specialty brands. “Suddenly it became acceptable to and her mom, Guadalupe, as well as Carey’s memo- nually and has 11 retail and outlet stores. The seg- sell beauty on television. Brands saw the vision and rable — and now viral — post-baby birthing show. ment had sales of $461.2 million in the first half thought, ‘What a great opportunity.’ It was about vol- “We’re live television and we are about the truth,” ended June 30, a 12 percent gain from the same ume but also about building a brand’s story. Women said Olum. “We have the greatest voracity and au- period a year earlier, as gross profits rose 15 per- [also] opened themselves up to [the channel] and thenticity of anyone.” cent to $190.3 million. said ‘Yes, I can do this.’” In the instance a guest should perhaps “say some- In April, HSN bought the Chasing Fireflies chil- According to Grossman, “knowing that the beauty thing off color or make claims not verified by clini- dren’s clothing business. Earlier this year, it sold category is an entrance point for new customers, we cals,” a five-second delay ensures that nothing is two companies, the window-treatment company needed to diversify our portfolio with new brands aired that shouldn’t be. Smith + Noble in May and The Territory Ahead that would attract consumers who may not have con- “You can say almost anything you want in a brick- clothing business in July. sidered HSN before. We needed to become a true and-mortar [location] but on television you have Garnet Hill, a 30-year-old label, has extended beauty ‘authority’ and bring product, demonstra- someone sitting with a red button,” said Olum. “You into multiple categories through the years. The tions and innovation to our customers. As you can will never see anything we say or do that is not true. company started out as an importer of English see, we’ve come a long way in transforming HSN Someone is watching for you.” flannel sheets and has developed into a multichan- into the ultimate beauty destination.” Looking to the future, Olum revealed that HSN nel marketer, offering bedding, home furnishings, To that end, Olum said it’s the blend of storytell- has plans to extend its storytelling concept beyond sleepwear, shoes, women’s apparel and children’s ing, education, accountability and authority that cre- the celebrity sphere and into the world of classic clothing online and through its catalogues. Today, ates a climate of consumer trust — and patronage fragrances, with a focus on “memory fragrances.” the company ships internationally and offers the — for HSN shoppers. “These are scents that you know your mom wore or Garnet Hill guarantee: “If an item does not com- “Unlike traditional and specialty store venues, that you wore as a little girl,” said Olum, who named pletely delight you, we’ll take it back for exchange we have a huge ability to bring [brands] to life,” said Lancôme Trésor as an example. “There is a whole cus- or refund. It’s that simple.” Olum, who referenced the runaway success of Mary tomer that relates to that kind of classic fragrance.” TravelSmith is said to be another standout in J. Blige’s My Life fragrance, which, in July 2010, sold Beyond fragrance, Olum said HSN plans to revisit the Cornerstone portfolio. It was founded in 1992 upward of 60,000 units in six hours, shattering all ex- and expand its hair care business, which she says “with one compelling mission: to make travel as isting fragrance records at HSN. “When Mary J. got represents the company’s “biggest white space,” as hassle-free and pleasurable as possible.” To that on and shared her stories, people’s hearts opened well as take on SPF, sun care and self tanning — a end, the mail-order and online business special- up. This was a woman who had a lot of pain in her traditionally troubled category for the direct-sell izes in wrinkle-resistant fabrics, both natural and life and said, ‘This [scent] represents my soul.’ People platform — in a more substantive way. high-performance, that it claims “look great after could not stop calling.” “Telling that [SPF] story is really hard,” said being stuffed in a suitcase for a week or worn on Sean “Diddy” Combs was another who, in Olum, who revealed HSN’s upcoming — and up- the red-eye overnight. We created stylish, ver- November 2009, blew out of the entire inventory dated — sun care platform will include self-tanning, satile, easy-care clothing and developed light- of his I Am King scent in just one hour, prompting body bronzing and sun safety. “This will be a huge weight, innovative accessories that make travel the network to cancel its scheduled second hour of initiative to come.” more secure and comfortable. And we hired like- programming. Similarly, , who was on As far as skin care and color cosmetics, Olum said minded travelers with a passion for sharing their HSN in July of 2011, sold more than 51,000 units of the one-on-one experience of having an on-air beauty knowledge and experience.” her Love and Light scent in six hours of air time, consultant or skin care specialist to explain the product Another Cornerstone label, Ballard Designs, while Eva Longoria’s offering, Evamour, sold more and its benefits is just as important as it is with scent. has an unlikely backstory. In 1982, Atlanta social- than 8,000 units in two hours in March 2012. “You walk into [a store] and pull something off ite Helen Ballard Weeks opened her Buckhead “HSN really gives you the opportunity to become the linear and unless you get someone to help you, condo to photographers from Metropolitan Home you don’t understand [a product’s benefits],” said Magazine to participate in its home-decorating Olum, who added that beauty tools featuring inno- contest. She won. Once the photos were pub- vative technology, like at-home hair remover NoNo, lished, 500 readers contacted the magazine ask- which has sold over 280,000 units since its 2010 ing where they could buy furnishings and other launch, have been flying off shelves. “HSN offers the decor items like hers. A year later, she quit her opportunity to visualize and understand and make job, sold her prize-winning home and started changes to your regimen however small.” Ballard Designs. The first catalogue consisted of a To do just that, makeup artists like Vincent two-page black-and-white brochure. Today, buyers Longo, Trish McEvoy and Paula Dorf been on to travel the globe in search of inspiration to create promote and explain their products as have Benefit timeless, European-inspired home furnishings for founders, Jean and Jane Ford, and beauty entrepre- design-oriented customers. Eva Longoria neur Iman. Nail guru Deborah Lippmann is also a “The Ballard Designs brand continues to grow sold more than top seller, selling out of her Forsaken Lip and Nail through expanding catalogue circulation and its 8,000 bottles duo in a mere 34 minutes. online presence as a trusted decorating resource,” of her scent, “Our ability to tell the story — how to do a clean the brand’s Web site notes. Evamour, in face, smoky eye or antiaging routine — and to fol- — ROSEMARY FEITELBERG two hours. low that up online is pretty extraordinary,” said Perlier celebrates HSN’s 35 years of pioneering electronic retailing. Congratulations to Mindy Grossman on creating a truly innovative interactive lifestyle network.

Available at HSN.com

‘Intelligent transportation with living royal jelly’ 14 WWD FRIDAY, AUGUST 24, 2012

SECTION II WWD.COM

WWDMILESTONES Celebrity Connection Proves a Hit

By MARCY MEDINA

LOS ANGELES — HSN is ready to go Hollywood. With a slew of multiplat- form tie-ins with movies, music and television, the net- work is establishing itself as an entertainment and market- ing channel though which stu- dios can harness the power of its 96 million-home reach. “A few years ago, we start- ed to build a strategy around entertainment as a whole and said, ‘How do we cre- ate a one-of-a-kind shopping experience surrounded by great products?’” said Bill Brand, HSN’s executive vice president of programming, marketing and business de- velopment, who joined the company six years ago after working at Lifetime and Above: Josh Turner in the studio. VH1. “I didn’t have HSN Right: Movie product tie-ins: “Eat, on my radar, but Mindy Pray, Love,” “Snow White and the Grossman said, ‘We can be Huntsman” and “Footloose.” an entertainment network.’” Brand said during the first few years of his tenure, he and the marketing efforts and re- Grossman, HSN Inc.’s chief ex- sponse from customers seeing ecutive officer, had their work the film. cut out for them, embarking “When we do entertainment on a Los Angeles road show to events, we do see a spike in meet with the heads of market- viewership and lift in engage- ing at movie studios. ment and sales,” he said. “We said, ‘We can combine Since then, the network shopping with your great sto- has done initiatives with ries and make a great experi- the films “Footloose,” “The ence for our customers.’ Our Help” and “Snow White and women want to know what’s the Huntsman.” “The Help” going on in the movie world,” event included exclusive col- said Brand. lections by Lela Rose and With the vast viewership, Cynthia Rowley and cook- the potential for ticket sales ware and food items from chef wasn’t lost on studios. Martha Hall Foose and Viking, “What they find appealing as well as a set appearance is we have an engaged custom- by Academy Award winner er base of women who respond Octavia Spencer. to many of the things we pres- “We were extremely ent to them,” he said. pleased. They are smart mar- In August 2010, HSN keters who know their core au- launched its first movie tie- dience and the two opportuni- in with Sony Pictures’ Julia ties strategically aligned,” said Roberts vehicle “Eat Pray Don Gross, vice president of Love.” The 72-hour event aired global promotion for The Walt a week before opening week- Disney Studios, which handles film set in Europe for a movie speak with Academy Award- the movie’s Hollywood pre- end and included three full all distribution and marketing that opens in 2014. winning costume designer miere in addition to 24 hours days dedicated to merchandise for Dreamworks films, includ- “The Hollywood community Colleen Atwood in London, of programming featuring inspired by the three locations ing “The Help.” understands what it takes to be who told her that she had footwear exclusives from where the movie takes place: But it’s not just movies. successful, which is early ac- never created a consumer Vince Camuto, Steven by Steve Italy, India and Bali, Indonesia. HSN has also launched quar- cess,” he said. “You need nine collection before. The re- Madden and Twiggy London Branded merchandise includ- terly live musical events with to 12 months on these types of sulting capsule collection among other fashion and ed collaborations with Naeem stars such as Lionel Richie, projects to create product and launched on the channel’s 24- beauty merchandise. Khan, Robin by Me&Ro, Rod Stewart and Josh Turner. great experiences.” hour May 30 event just before LeeAnne Stables, presi- Rebecca Moses, Hutton “There aren’t many market- The “Snow White and the the movie’s opening night. dent of consumer products at Wilkinson and Lancôme. ing platforms for records any- Huntsman” tie-in exemplifies Atwood appeared on HSN to Paramount, said the studio is “Our customers loved more, so our TV team worked this point. The network had ac- sell her line and share some planning to partner again with it and they also went to with the labels to bring it back. cess to visuals from the movie of the original costumes and HSN on an end-of-year release the movie,” Brand noted. In addition to the live perfor- and to the set about a year be- her stories about dressing that Stables calls “a fantastic “That really impressed the mances, we are able to give fore its release. the stars. Other merchandise program that will probably go Hollywood community. Not early access and something “My primary goal was to included exclusive pieces down in history as one of the only did we treat their proper- exclusive that they can have create a marketing vehicle by Loree Rodkin and Heidi perfect movie promotions.” ty with respect, we also deliv- first,” said Brand of the live for this film,” said Stephanie Daus, as well as thematic Not only have the pro- ered audiences to theaters.” concert shows and preorder- Sperber, Universal Studios’ items from Ranjana Khan grams helped keep core cus- In pre- and post-event cus- ing the CDs. president of partnerships and Adrianne Landeau. tomers engaged, they have tomer surveys, more than 75 HSN’s most recent pro- and licensing. “At the box “We are used to seeing li- raised HSN’s profile among percent said the HSN tie-in gram was a TV tie-in ear- office, the HSN customer — censed products and it far first-time users. increased their interest in lier this month, the launch of women over 25 — tends to be exceeded anyone’s expecta- “Our goal is trying to con- the movie, and more than 70 Forsaken, a beauty and home underrepresented. To rec- tions,” said Sperber. “If we vert them into customers by percent said they planned collection inspired by HBO’s ognize that audience is very ever have any movies that changing their perception to see the movie on opening “True Blood.” valuable. They tend to watch align with their customers, of the brand,” Brand added. weekend. While there’s no de- While Brand declined to re- the channel for a long time, there’s no question we’ll be “For us, it’s been a key part finitive way to calculate what veal which movies are on the so having a 24-hour dedi- calling them again, and I’m of how we’ve repositioned percentage of the box-office roster for next year, he said cated show with quality mer- sure other studios want to do the brand. We went out there, take came from HSN cus- the network is in heavy pro- chandise and content was a the same.” took some risks and now it’s tomers, Brand said there’s a duction for the 2013 slate and great thing.” For Paramount Pictures’ cool to see that the industry definite correlation between already has staffers going to a An HSN designer got to “Footloose,” HSN sponsored has taken notice.” Congratulations HSN on your 35th Anniversary Congratulations Mindy Grossman, the most brilliant and innovative CEO on the planet Adrien Arpel UNIVERSAL PICTURES

Warmly Congratulates HSN On 35 Fabulous Years

© UNIVERSAL STUDIOS