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Glamour All In Bargains

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By RICHARD MULLINS, The Tampa Tribune

Published: December 22, 2007

Shopping in an unassuming Brandon strip mall, Wayne Finley lets out a breathy "Oh, yeah," upon seeing stacks of Joy Mangano clothing steamers still in their boxes. Original price, $27.99 on the home shopping channel HSN. The price now, $9.99.

"I come here all the time," Finley says while filling a shopping cart full of "My Little Steamers." "Oh, yeah, this will go up on eBay ... I've bought things here for $3 that I sold for $49 - $69. Just don't tell anyone about this place."

This place that so captivates Finley is one of the most low-key corners of the high-energy sales giant HSN, a rare physical manifestation of the virtual sales world HSN operates on TV and the Internet. Here, the company gathers only overstock, returned and discontinued items that didn't sell on air: microwaves, shoes, panties, food processors, jewelry and ceramic figurines.

But wait: There's more good news for bargain hunters. HSN customers now return roughly one in six products they bought from HSN, a return rate that has been rising through 2007 - meaning the company has more product to liquidate in outlet stores.

On air, HSN may exude style and glamour. Here, however, HSN operates a Spartan retail motif of fluorescent lighting and cardboard boxes stacked in rows, bearing HSN's biggest celebrity names: Suzanne Somers, Todd English and Wolfgang Puck. The pricing reflects a desire to move items fast, with discounts topping 70 percent on items that haven't sold in a few months.

Don't look for HSN to advertise the store. The HSN name does not appear on the store sign outside. Instead, it reads HSC Home Shopping Outlet, a term that hark back to HSN's former name "Home Shopping Club."

Only when patrons go inside do they see the HSN name, on stickers stuck on products that declare the price the item sold for originally on HSN. The variety spans the range of HSN's on-air lineups: leopard-skin pattern high heel shoes, yellow leather belts, floral print panties, ceramic figurines, cookware, dishes and several cases of jewelry.

One day last week, there were 42 Bravetti Platinum Pro microwaves (original price $149, now $119), dozens of dinnerware sets (originally $99.50, now $59.70), several "Barry's Bootcamp" 5-pack fitness DVDs and Wolfgang Puck cookbooks (originally $22.50, now $6.99.)

Some of the products are overstock, or discontinued items still wrapped and ready for shipping. Others items HSN sold and shipped to customers, who opened the packages, and sent them right back to HSN wrapped in gray duct tape. One microwave came back from New Rochelle, N.Y. A steamer returned from Hoboken, N.J. A stained glass kitten lamp returned from Minneapolis.

Now out of the TV camera spotlight and back on the shelf, those products receive a ruthless discounting schedule. It starts with 25 percent off the original "on-air" price. If they sit on the shelf a few months, that discount rises to 40 percent off. A few more months, 75 percent off. The bargains get better on special sale days, including "Senior Day" that gives people 50 and older an extra 10 percent off. Other discounts rotate around the store, 70 percent off cubic zirconia jewelry, for example, or 30 percent off underwear.

After-Market Items
HSN officials say they screen every returned item for quality before stocking in the outlet store.

"These are bargains, but they are pristine," said HSN spokeswoman Lisa Zupko. "We're not trying to sell anything substandard. We have certain quality standards that any product has to meet before it goes into stores."
HSN operates three such stores in Florida. One in Largo, one in Brandon and another in Orlando. Those are for the public, but there is another more secret, exclusive location. Within the HSN campus in St. Petersburg, the company operates its own outlet store for employees only, with similar discounts. Those aren't the only places HSN overstock or returned items appear, however.
HSN operates its own liquidation division through the Web site HSNliquidation.com, selling products by the pallet to select vendors who pass a vetting process. Here, HSN grades inventory on a three-tier scale. "1st quality," or "never been sold" items get a "White" rating. Returned items or items with damaged packaging get a "Green" rating, and items with damaged or missing pieces get a "Red" rating, but are still for sale.

Resellers Are Frequent Customers

Vendors may buy the HSN products, but they don't get the HSN cache. Rather, vendors must agree to never use the letters "HSN" or the words "Home Shopping Network" in their own merchandizing and cannot sell the product online.

Nevertheless, thousands of HSN items appear on eBay, bearing descriptions that say just what the item sold for originally on air. Also, several independent contractors buy overstock items from HSN and resell it on their own Web site, including HSNliquidators.com.

HSN is similar to any other retailer that operates outlet stores. Cataloger Lands' End runs several retail stores, stocking overstock items and returned apparel, including shirts with the monogrammed letters of customers who sent them back.

HSN's rival QVC operates its own liquidation retail stores.

"There's always someone looking to get a bargain," said Lynn Lavigne, owner of HSNlquidators.com, which operates out of a shipping center in Buena, N.J., near Atlantic City. Lavigne got into the liquidation business after a salon she ran shut down and she found herself stuck with thousands of dollars in lipstick to unload. She turned to liquidators and decided to get into that work too. Now she operates a warehouse operation selling hundreds of thousands of products a year.

Recently, she pounced on about $100,000 worth of Jerome Alexander cosmetics that were discontinued from HSN. "That's all gone now, we sold it in six, nine months," she said. "When you buy things on sale like this, you can always turn around and resell it for cheaper than anyone would find it retail."

Reporter Richard Mullins can be reached at (813) 259-7919 or

STORE LOCATIONS

Largo: 10801 Starkey Road., just south of Bryan Dairy Road.

Brandon: 225 W. Brandon Blvd., just west of Parsons Avenue.

Orlando: 6389 W. Colonial Drive, just east of Hiawassee Road.

rmullins@tampatrib.com.

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