CWEB analysts believe that there are several reasons for QVC Group Inc (Quarte Retail Group) to file for Chapter 11 bankruptcy. A recent report by a popular news outlet mentioned that a source told them of the potential bankruptcy. However, the iconic cable network has not confirmed the news, despite being asked about the matter by several news outlets. QVC shares plunged to their lowest after the report was released.
Bloomberg was the first to report on the potential Chapter 11 bankruptcy quoting a source familiar with the matter. It also said the QVC Group had an outstanding debt of $6.6 billion. This includes a credit facility that matures in October and the loan has $2.9 billion drawn on the facility.
CWEB analysts say that there are many reasons for the growing financial troubles of the four-decade home shopping network and a possible bankruptcy. There has been declining demand as well as huge changes in customer habits. The number of customers shopping through cable has decreased and revenues have also fallen.
The cable network sells merchandise such as clothing, electronics and beauty products. Higher tariffs and online competition in these sectors have also contributed to decline in sales through cable, as TV viewership has fallen, and web fans gravitate towards streaming services.
Growing competition from Amazon and the TikTok shop have also largely contributed to the decline in sales through cable. When QVC started in 1986 blended shopping and entertainment through TV reached millions of global web fans. Customers used credit cards to shop. In recent times, streaming is the most popular way by which many younger web fans shop. Social media sites, such as TikTok, Instagram, and Facebook make shopping easier for the current generations.
QVC, which also owns HSN studio in Florida relocated the studio to its West Chester, Pennsylvania campus, which is the headquarters of the parent company, QVC Group Inc. It also fired employees in Florida before the shift.
