Quarterly report pursuant to Section 13 or 15(d)

Business Segments and Sales by Product Group

v3.21.2
Business Segments and Sales by Product Group
9 Months Ended
Oct. 30, 2021
Segment Reporting [Abstract]  
Business Segments and Sales by Product Group

(10)   Business Segments and Sales by Product Group

During fiscal year 2019, the Company changed its reportable segments into two reporting segments: “ShopHQ” and “Emerging Business.” In light of strategic shifts in the Company’s emerging businesses, the Company’s Chief Executive Officer, the chief operating decision maker, began reviewing operating results of the Emerging Business segment separately from its core business, ShopHQ. The chief operating decision maker is the Company’s Chief Executive Officer. These segments reflect the way the Company’s chief operating decision maker evaluates the Company’s business performance and manages its operations. Substantially all of the Company’s sales are made to customers residing in the United States.

The Company does not allocate assets between the segments for its internal management purposes, and as such, they are not presented here. There were no significant inter-segment sales or transfers during the first nine months of fiscal 2021 and fiscal 2020. The Company allocates corporate support costs (such as finance, human resources, warehouse management and legal) to its operating segments based on their estimated usage and based on how the Company manages the business.

ShopHQ Reporting Segment

The ShopHQ segment encompasses the Company’s flagship nationally distributed entertainment television network. ShopHQ informs, promotes, demonstrates and sells its products to consumers using interactive video across multiple sales channels including linear television, online streaming, mobile and social platforms, brick and mortar retail, and OTT and CTV platforms such as Roku, AppleTV and Samsung connected televisions.

Emerging Business Reporting Segment

The Emerging Business segment consists of the Company’s early developing brands and business models. This segment includes the Company’s owned and operated consumer brands that include Christopher & Banks, J.W. Hulme, Cooking with Shaquille O’Neal, Kate & Mallory, Live Fit MD and TheCloseout.com and the Company’s media commerce services brand iMedia digital services and niche television networks ShopBulldogTV and ShopHealthHQ.

Net Sales by Segment and Significant Product Groups

Three-Month Periods Ended

Nine-Month Periods Ended

    

October 30,

    

October 31,

    

October 30,

    

October 31,

    

2021

2020

2021

2020

(in thousands)

ShopHQ

Net merchandise sales by category:

 

  

 

  

 

  

 

  

 

Jewelry & Watches

$

38,269

$

36,744

$

122,568

$

115,204

Home

 

15,166

 

14,805

 

42,711

 

39,947

Beauty & Health

 

21,139

 

31,105

 

57,043

 

98,539

Fashion & Accessories

 

12,697

 

9,787

 

38,388

 

33,462

All other (primarily shipping & handling revenue)

 

10,087

 

11,841

 

30,617

 

31,599

Total ShopHQ

 

97,358

 

104,282

 

291,327

 

318,751

Emerging Business

 

33,323

 

4,743

 

65,998

 

10,623

Consolidated net sales

$

130,681

$

109,025

$

357,325

$

329,374

Performance Measures by Segment

Three-Month Periods Ended

Nine-Month Periods Ended

    

October 30,

    

October 31,

    

October 30,

    

October 31,

    

2021

2020

2021

2020

(in thousands)

Gross profit

  

  

ShopHQ

$

41,427

$

38,801

$

121,115

$

118,487

Emerging Business

12,994

2,013

$

27,299

$

4,176

Consolidated gross profit

$

54,421

$

40,814

$

148,414

$

122,663

Operating income (loss)

 

  

 

  

 

  

 

  

ShopHQ

$

(6,804)

$

(2,443)

$

(11,471)

$

(2,498)

Emerging Business

 

802

 

(952)

 

1,048

 

(4,061)

Consolidated operating loss

$

(6,002)

$

(3,395)

$

(10,423)

$

(6,559)

Depreciation and amortization

 

  

 

  

 

  

 

  

ShopHQ (a)

$

10,249

$

8,758

$

26,483

$

19,176

Emerging Business

 

428

 

194

 

1,082

 

521

Consolidated depreciation and amortization

$

10,677

$

8,952

$

27,565

$

19,697

(a) Includes distribution facility depreciation of $936,000 and $975,000 for the three-month periods ended October 30, 2021 and October 31, 2020 and $2,838,000 and $2,997,000 for nine-month periods ended October 30, 2021 and October 31, 2020. Distribution facility depreciation is included as a component of cost of sales within the accompanying condensed consolidated statements of operations.