Home Shopping Network 2010 Annual Report Download - page 8

Download and view the complete annual report

Please find page 8 of the 2010 Home Shopping Network annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 89

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89

Table of Contents
Frontgate features premium, high quality bed, bath and kitchen accessories, as well as outdoor, patio, garden and pool furnishings and
accessories. Ballard Designs features European-inspired bed, bath, dining and office furnishings and accessories, as well as rugs, shelving and
architectural accents for the home. Garnet Hill offers bed and bath furnishings and soft goods, as well as apparel and accessories for women and
children, and Smith+Noble offers custom home furnishings and window treatments. The Territory Ahead offers casual apparel for men and
women and TravelSmith offers travel wear for men and women and related accessories. Improvements features thousands of innovative home,
patio and outdoor products.
The various brands within Cornerstone generally incorporate on-site photography and real-life settings, coupled with related editorial
content describing the merchandise and depicting situations in which it may be used. Branded catalogs are designed and produced in-house,
which enables each individual brand to control the production process and reduces the amount of lead time required to produce a given catalog.
New editions of full-color catalogs are mailed to customers several times each year, with a total annual circulation in 2010 of more than
275 million catalogs. The timing and frequency of catalog circulation varies by brand and depends upon a number of factors, including the
timing of the introduction of new products, marketing campaigns and promotions and inventory levels, among other factors.
Cornerstone also operates Frontgate.com, BallardDesigns.com, GarnetHill.com, SmithandNoble.com, TerritoryAhead.com,
TravelSmith.com and Improvementscatalog.com, among other branded websites. These websites serve as additional, alternative storefronts for
products featured in related print catalogs, as well as provide customers with additional content to support and enhance their shopping
experience. Additional content provided by these websites, which differs across the various websites, includes decorating tips, measuring and
installation information, online design centers, gift registries and travel centers, as well as a feature that allows customers to browse the related
catalog online.
Supply
HSN and Cornerstone purchase products by way of short- and long-term contracts and purchase orders, including products made to their
respective specifications, as well as name brand merchandise and lines from third party partners, typically under certain exclusive rights. The
terms of these contracts and purchase orders vary depending upon the underlying products, the retail channel in which the products will
ultimately be sold and the method of sale. In some cases, these contracts provide for the payment of additional amounts to partners in the form of
commissions, the amount of which is based upon the achievement of agreed upon sales targets, among other milestones. In addition, in the case
of some purchases, HSNi may have certain return, extended payment and/or termination rights. The mix and source of products generally
depends upon a variety of factors, including price and availability, and HSNi manages inventory levels through periodic, ongoing analyses of
anticipated and current sales. No single vendor accounted for more than 10% of HSNi’s consolidated net sales in 2010, 2009 or 2008.
Marketing and Merchandising
HSN continuously works to bring customers a broad assortment of new and existing products in a compelling, informative and entertaining
format. For example, HSN frequently collaborates with experts in a variety of fields to present special events on the HSN television network
featuring HSN products and relevant expert content. In most cases, these events are staged at HSN’s television studios and, to a lesser extent,
staged at venues associated with featured products. Online versions of certain special events are also featured on HSN.com for a limited period
of time following their broadcast on the HSN television network. Also featured on HSN.com are over 16,000 video demonstrations of products
available for sale.
In an effort to promote its own differentiated brand, HSN seeks to provide its customers with unique products that can only be purchased
through HSN. HSN frequently partners with leading personalities and brands to develop product lines exclusive to HSN and believes that these
affiliations enhance the awareness of the HSN
5