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HSN's Luster Dulls With Recession

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By RICHARD MULLINS

rmullins@tampatrib.com

Published: March 4, 2009

Women lately appear willing to buy things for themselves at HSN Inc., just not on something "selfish."

That's one insight that executives of St. Petersburg-based HSN revealed to investors Tuesday, explaining how an awful retail economy clipped the company's fourth-quarter financial results.

For instance, sales were sluggish in jewelry and fashion, but were more solid in electronics and health-related items - things a whole family could use or that make their lives more productive. Fewer diamonds, more cookware and BlackBerry cell phones.

Speaking of the customer, HSN Chief Executive Officer Mindy Grossman said, "She has made a delineation from a self-purchase and a selfish purchase." That and other factors helped HSN "more than hold its own" against rivals, Grossman said.

When HSN peddled BlackBerry phones late last year, they sold out. In the next few months, HSN will start selling more.

The company counts as a major employer in the area, with 2,494 workers in Florida. It has 6,100 nationally.

Despite some bright spots, the financial results overall were still difficult. Sales at HSN fell 11 percent in the fourth quarter to $778.5 million. Not counting a large accounting charge, profits fell 32 percent to $159 million.

Within that, HSN's catalog business saw sales fall 25 percent to $233 million. Partly in response, the overall company cut 250 jobs during the fourth quarter, eliminated 2009 merit increases, reduced employee travel and cut the company's 401(k) contribution by 80 percent.

Stock in HSN responded Tuesday by staying relatively flat, down 6 cents a share to close at $3.79 per share.

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

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