Home Shopping Network 2012 Annual Report Download - page 6

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Table of Contents
PART I
Unless otherwise indicated in this Annual Report or the context otherwise requires, all references in this Annual Report to “HSNi,” the
“Company,” “us,” “our” or “we” are to HSN, Inc. and/or its subsidiaries and affiliates.
Business Overview
HSNi is an interactive multi-channel retailer offering experiences through various platforms including television, online, mobile, in
catalogs and in retail and outlet stores through its two operating segments, HSN and Cornerstone. HSNi strives to transform the shopping
experience by incorporating experts, entertainment, inspiration, solutions, tips and ideas in connection with the sale of products. HSN is an
interactive lifestyle network offering a curated assortment of products primarily through television home shopping programming on the HSN
television networks, through its business-to-
consumer digital commerce site HSN.com, through mobile applications and through its outlet stores.
Cornerstone is comprised of interactive, aspirational home and apparel lifestyle brands, including Ballard Designs, Chasing Fireflies, Frontgate,
Garnet Hill, Grandin Road, Improvements and TravelSmith. Cornerstone distributes more than 300 million catalogs annually, operates eight
separate internet sites and operates 11 retail and outlet stores.
Our principal offices are located at 1 HSN Drive, St. Petersburg, Florida 33729 and our main telephone number is 727-872-1000.
History
HSNi’s predecessor company began broadcasting television home shopping programming from its studios in St. Petersburg, Florida in
1981 and, by 1985, was broadcasting this programming through a national network of cable and local television stations 24 hours a day, seven
days a week. The company continued to broaden its national distribution network through a combination of cable, satellite and broadcast systems
and, as of December 31, 2012, the HSN television networks reached approximately 95.0 million residential homes in the United States.
The company began conducting business online in 1994 and formally launched HSN.com, the online shopping portal for the HSN
television network, in 1999.
The company acquired Improvements, a catalog featuring thousands of innovative home, patio and outdoor products, in June 2001, and
significantly grew its catalog business through the acquisition of Cornerstone Brands, Inc., with its portfolio of leading print catalogs and related
websites, in April 2005.
HSNi was incorporated in Delaware in May 2008 in connection with the spin-off of several businesses previously owned by
IAC/InterActiveCorp, or IAC. HSNi was formed to hold HSN and Cornerstone, the businesses that previously comprised most of IAC’
s retailing
segment and are referred to herein as the “HSNi Businesses.” The spin-off from IAC occurred on August 20, 2008 and, in connection with the
Spin-off, HSNi's shares began trading on the NASDAQ Global Select Market under the symbol "HSNI."
In early 2012, the company initiated efforts to strengthen its portfolio of home and apparel lifestyle catalog companies. This resulted in the
acquisition of Chasing Fireflies, LLC, a leading direct-to-consumer premium children's and family's lifestyle brand, in April 2012. This was
followed by the divestitures of Smith+Noble, a brand specializing in window treatments, in May 2012 and The Territory Ahead, a brand
specializing in casual apparel for men and women, in July 2012.
What We Do
HSNi markets and sells a wide range of third party and private label merchandise directly to consumers through HSN, which includes the
HSN television networks, its related website, HSN.com, as well as through Cornerstone’s portfolio of catalogs and related websites.
HSNi is committed to providing an evolving variety of quality products at reasonable prices and from brands that resonate with its
customers. Products offered through HSN include jewelry, fashion (apparel & accessories), beauty & wellness, and home & other (including
household, home design, electronics, culinary, fitness and other). Featured products include proprietary label products and third party-branded
products, some of which are produced exclusively for HSN, as well as merchandise generally available through other retailers. Cornerstone
primarily offers home and outdoor furnishings and casual and leisure apparel with the majority produced exclusively for Cornerstone.
2
ITEM 1. BUSINESS