HSN, Family Circle join forces in marketing blitz - Home Shopping Network Inc

Discount Store News, Nov 5, 1990 by Arthur Markowitz

HSN, Family Circle Join Forces in Marketing Blitz

ST. PETERSBURG, Fla. - The Home Shopping Network, in a move to upgrade its image, has formed a marketing alliance with Family Circle magazine to jointly build audience and circulation and sell merchandise.

The teleshopper's move came on the heels of three other, unrelated developments. The retailer reported record sales of $1.008 billion and $38.8 million in earnings in the fiscal year ended Aug. 31; president Lowell W. Paxson, who co-founded the company and what developed into the home TV shopping field with chairman and chief executive officer Roy M. Speer, retired for unexplained reasons, and the company beat back an organization effort by a Teamster local at its Waterloo, Iowa, fulfillment center.

The deal between HSN and Family Circle, the result of over nine months of meetings, is seen as enhancing the teleshopper's image through its association with the long-established, respected 5.1 million circulation women's service magazine. Family Circle said its total audience was 21 million readers.

Family Circle's gain would seem to be its visibility on the various HSN programs which reach over 60 million homes. Its shows are seen on 1,750 cable systems, over 90 broadcast stations and 11 company owned and operated stations, a potential audience that reached about 66% of the nation's households.

Executives of both companies noted that the teleretailer and magazine have similar demographics that would make it easy to communicate with each other's audience.

The venture calls for: * HSN to sell Family Circle subscribers on its programs in short segments that would also offer helpful household hints provided by the magazine; * HSN to run promotions for Family Circle in Bargaineer, its quarterly membership magazine with a four million circulation and in the 51.5 million catalog it mails each year; * HSN to include direct-response magazine subscription offers in the 70,000 packages it ships daily; * HSN to sponsor an advertising and advertorial program in Family Circle; * Family Circle to provide special TV programming based on magazine features that will run exclusively on HSN; * Family Circle to offer selected items from HSN's catalogs in its FC Bazaar section that has been providing merchandise to readers for 20 years.

Several HSN advertorials have already run in Family Circle, while TV spots featuring Kerry Whitaker, the magazine's national beauty and style consultant, will start to air at presstime. Whitaker has also been signed on as a spokeswoman for HSN.

As for HSN's financial results, the $1 billion in sales was a 30.2% jump from the $774.3 million reported for last year, while the $38 million income was a turnaround from the $14.9 million loss in 1989.

Paxson will become a consultant to HSN for a four-year period starting Jan. 1, 1991. In the past, he and Speer have had disagreements on the growth and direction of HSN.

In the Waterloo, Iowa, organization attempt, HSN workers by nearly a 2-to-1 margin voted against Teamsters Local 238 (AFL-CIO). The facility employs over 300 people.