Home Shopping Network 2011 Annual Report Download - page 7

Download and view the complete annual report

Please find page 7 of the 2011 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 84

  • 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

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.
Smith+Noble offers custom home furnishings and window treatments and Grandin Road offers designer-inspired
home accents. 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 2011 of more than 300 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,
GrandinRoad.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
2011, 2010 or 2009.
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.
5