Valuevision Urges Shareholders to Vote the White Proxy Card to
Protect Their Investment and Elect Valuevision's Eight Highly
Qualified and Experienced Nominees
Vote the WHITE Proxy Card Now -- Only Days Remain
MINNEAPOLIS, MN--(Marketwired - Jun 10, 2014) - ValueVision
Media, Inc. (NASDAQ: VVTV) ("ValueVision"), a multichannel
electronic retailer via TV, Internet and mobile operating as
ShopHQ, today mailed a letter to its shareholders urging them to
protect their investment by voting FOR ValueVision's eight highly
qualified and experienced nominees on the WHITE proxy card.
ValueVision's 2014 Annual Meeting of Shareholders is scheduled for
Wednesday, June 18, 2014.
The full text of the letter from Randy Ronning, Chairman of the
Board, is below:
June 10, 2014
Dear Fellow ValueVision Shareholder:
ValueVision's Annual Shareholder Meeting is fast approaching and
your vote is extremely important. Your Board of Directors is
focused on driving value for all shareholders and continuing to
position ValueVision for long-term, sustained growth.
REQUESTED ACTION: The choice is clear. Your Board urges you to
vote the enclosed WHITE proxy card "FOR" ValueVision's eight highly
qualified and experienced nominees: Jill Botway, John Buck, William
Evans, Landel Hobbs, Sean Orr, Lowell Robinson, Randy Ronning and
Keith Stewart.
When casting your vote, we ask that you strongly consider the
following points:
- Your Board and management team, taken together, are the second
largest shareholder of ValueVision, and their interests are closely
aligned with your own;
- ValueVision has a proven track record of returning the Company
to growth and success, the right strategy to continue driving
shareholder value, and a team of over 1,000 employees and hosts who
are passionate about the Company and the 1.4 million customers they
serve; and
- Although the Clinton Group ("Clinton") beneficially owns only
4.1% of ValueVision's shares, Clinton has put forth a slate of
nominees that would control your Board and your company.
Shareholders should consider that ValueVision's Board and
management team are responsible for executing the extensive
turnaround that has, in our view, positioned the Company to deliver
strong value and shareholder returns.
We urge you to reject Clinton and its nominees:
- Do not allow Clinton and its nominees to risk derailing the
significant progress we have made over the past five years;
- Do not risk losing the share price upside that all of the
independent research analysts agree your Board and management team
have positioned the Company to deliver; and
- Do not turn over the leadership of your company to the nominees
of a 4.1% shareholder who has reduced its beneficial ownership by
almost 40% over the course of its campaign.
LIKE YOU, VALUEVISION'S BOARD AND MANAGEMENT TEAM ARE HEAVILY
INVESTED IN VALUEVISION'S SUCCESS
The interests of the Board and management team are closely
aligned with shareholders' interests. Collectively, your Board and
management team are the second largest shareholder of ValueVision,
with an ownership of 12.6% of the Company's outstanding common
stock. Specifically:
- ValueVision's Chief Executive Officer, Keith Stewart,
personally beneficially owns 5.3% of the Company's common stock.
Mr. Stewart purchased approximately 1.6 million of these shares in
the open market with his personal funds; and
- ValueVision's other directors and officers beneficially own
7.3% of the Company's common stock.
When your Board appointed Keith Stewart as CEO in January 2009,
ValueVision was on the brink of bankruptcy. Mr. Stewart's initial
mandate as CEO was to form a new vision for the Company and to lead
the turnaround of ValueVision. Since Mr. Stewart's appointment as
CEO, ValueVision's share price has increased by 848%. In addition,
ValueVision's share price has increased 169% since August 2012,
when Mr. Stewart announced that the Company had returned to
growth.
The ValueVision Board and management team, with their collective
12.6% ownership position, are strongly incentivized to continue
executing on ValueVision's winning strategy to drive further
shareholder value creation.
In contrast, despite a sustained campaign to give its nominees
control of ValueVision's Board, Clinton has dramatically decreased
its holdings in ValueVision shares. Clinton has reduced its
beneficial ownership by an average of more than 550,000 shares in
each of the last two quarters and, since peak ownership in late
2013, has reduced its beneficial ownership by almost 40%, from
approximately 6.5% to approximately 4.1%. In light of this
significant reduction in beneficial ownership over a short period,
we believe shareholders should consider whether Clinton's interests
are aligned with those of other long-term shareholders.
VALUEVISION HAS A PROVEN TRACK RECORD OF SUCCESS ALONG WITH THE
RIGHT STRATEGY AND TEAM TO SUBSTANTIALLY GROW SHAREHOLDER VALUE
An engaged and growing customer base of over 1.4 million
shoppers -- an increase of approximately 22% year-over-year -- is a
part of ValueVision's foundation for long-term, sustainable growth.
ValueVision's management team, working closely with the Board, has
implemented meaningful changes over the past five years that are
yielding results and that we believe will deliver great value in
the future. Specifically, we have focused on four key growth
strategies:
1. Broaden and diversify our compelling mix of
merchandising to attract customers and drive repeat purchases;
2. Expand and enhance our TV distribution platform to reach
more potential viewers and to convert a greater number into active
customers;
3. Be a "Watch & Shop" anytime, anywhere experience,
with multiple customer touch-points, including online and mobile;
and
4. Optimize our customer experience across the business to
support the growth and maintenance of an expanding customer
base.
ValueVision shareholders have benefited from our efforts,
including the transformation of a consistently (and substantially)
cash-flow-negative business into a growing enterprise with eight
quarters of consecutive increases in sales and positive Adjusted
EBTIDA. Through our successful implementation of the Company's
strategy, ValueVision's Board and management team have:
- Grown the customer base to over 1.4 million today vs. 754,000
in 2008;
- Launched the ShopHQ multichannel shopping destination
brand;
- Reduced the average selling price by 54% since 2008 to reach a
broader customer demographic;
- Developed secure and convenient Internet and mobile access,
leading the industry in Internet sales penetration;
- Dramatically improved the customer experience, service and
satisfaction levels, as evidenced by a 54 NPS rating in 2013 vs. 36
NPS in 2011;
- Streamlined companywide operations by reducing return rates to
22% in 2013 from 31% in 2008, reducing transaction costs per unit
by 49% since 2008 and reducing TV distribution cost per household
by 38% since 2008;
- Improved the quality and reach of the Company's TV distribution
footprint while significantly reducing its cost, delivering annual
rate savings of $55 million; and
- Enhanced the strength and flexibility of ValueVision's balance
sheet by repaying $53 million in preferred stock obligations,
replacing high-interest debt obligations with a $75 million, cost
effective credit facility with PNC bank, resulting in lower
interest expense and stronger balance sheet condition.
These successful initiatives confirm, in our view, that we have
the right Board -- with its deep experience and significant skills
in areas critical to our business -- to continue to oversee the
development and implementation of the Company's strategy. In
addition, ValueVision's management team, headed by Mr. Stewart, is
made up of world-class leadership with extensive, relevant industry
experience. We believe we have the right team in place to continue
executing our strategy and create even greater shareholder
value.
CLINTON'S TRACK RECORD IN A NUMBER OF ITS RETAIL AND ECOMMERCE
INITIATIVES, ALONG WITH RECENT COMMERCIAL FAILURES AT CERTAIN
COMPANIES WHERE ITS NOMINEES HAVE SERVED AS STEWARDS, THREATENS SHAREHOLDER VALUE
In contrast to the performance of your Board and management
team, we believe the recent track record of Clinton and three of
its nominees in retail and eCommerce should raise serious questions
and concerns for shareholders.
In campaigns where Clinton attempted to obtain or obtained a
board seat, the target's median total shareholder return
underperformed the Russell 2000 by 6.8% after 500 or fewer trading
days post activist campaign announcement. In campaigns where
Clinton was successful in gaining a board seat, the target's median
total shareholder return was even worse, underperforming the
Russell 2000 by 13.2% after 500 or fewer trading days post activist
campaign announcement.1
Clinton Group's poor performance at retailers such as The Wet
Seal, Inc. ("Wet Seal") demonstrates a severe lack of understanding
of the basics of retail strategy, in our view. As noted by a Wet
Seal analyst:
"Noted activist investor, Clinton Group, accumulated a 7%
position in WTSL and began agitating for change in spring 2012...We
believe the proxy battle distracted management from running the
business resulting in comps accelerating to the downside." -
Jeremy Hamblin & Peter Mahon, Dougherty & Company, August
12, 2013
In reality, following the appointment of Clinton's nominees to
the Wet Seal Board, the Company's stock price declined by 72%, as
of June 9, 2014, resulting in $206 million in shareholder value
destruction. Are you willing to risk the same at your company,
and to your investment?
Clinton has compared ValueVision to "other eCommerce companies"
and says it has a multi-platform "retail theater" strategy in mind
as the secret ingredient of superior value creation. ValueVision
shareholders, however, should know that three of Clinton's
nominees, Thomas Beers, Fred Siegel and Mark Bozek, appear to have
a lackluster recent track record in eCommerce retail and their
production of "retail theater" appears to have never made it to the
stage.
In 2012, Mr. Bozek announced the launch of eVine, after raising
money from investors and enlisting fellow Clinton nominees, Thomas
Beers and Fred Siegel, among others, as advisors. Two years later
eVine, described in the media as a "web-only shopping platform"2
has a website that does not appear to sell anything.
Shareholders should ask themselves: Is a vote for the Clinton
nominees a vote for experimenting with the same strategy at
ValueVision, only using your money? If Clinton succeeds in getting
its nominees elected, they will have the ability to use your
company, at your expense, as a testing ground to see if they can
get it right.
THIS TRACK RECORD IN RETAIL AND ECOMMERCE MAY BE THE REASON
CLINTON CONTINUES TO MAKE INACCURATE STATEMENTS TO SHAREHOLDERS
ABOUT VALUEVISION
- In Our View, Clinton Continues to Misunderstand or Misrepresent
ValueVision's Programming and Merchandising Strategy and Has Failed
to Offer New or Unique Merchandising Ideas THE FACTS: ValueVision
continues to broaden its product mix from the Jewelry & Watch
category toward other product areas that appeal to a larger
consumer base, including Fashion & Accessories, Beauty, Health
& Fitness, and Home & Consumer Electronics. Since 2008, we
have invested in our core and emerging product categories while
shifting the merchandise mix of Jewelry & Watch from 56% of
total sales to 43% of total sales in 2013. At the same time, we
have invested in our emerging categories of Fashion &
Accessories, Beauty, Health & Fitness, and Home & Consumer
Electronics, which typically attract more new customers and
increase purchase frequency. We have always been open to new ideas
and value-creating strategies and we now offer greater product
diversity and a broader assortment to our customers than at any
other time in the Company's history.
- Clinton Continues to Make Inaccurate Claims About ValueVision's
Proprietary Brands THE FACTS: ValueVision has developed a growing
selection of proprietary brands, including Home brands Cozelle
Linens, North Shore Linens, Cook's Tradition Cookware, Cook's
Companion and Grand Suites; Fashion brands Kate and Mallory, OSO
Casuals, Geneology, Addressing Woman, Glitterscape and Affinity for
Knits; and Jewelry brands Gem Treasures, NYC II, Adair, Gems En
Vogue II, Brilliante, Portofino, Diamond Treasures, Toscana, Dine
Spirit, Gem Insider and Passage to Israel. Clinton's claim that
ValueVision has just two proprietary brands is false. We believe
this inability to get the facts straight calls into question the
accuracy of other claims Clinton makes about proprietary brands at
QVC and HSN. ValueVision's successful proprietary brand strategy is
a value driver with revenue from proprietary brands growing 67% in
the last two fiscal years, increasing from 17% of our product mix
in fiscal 2011 to 25% in fiscal 2013.
- Clinton Dismisses the Company's Value-Enhancing EBITDA
Improvements Since 2012 as Solely Attributable to "Essentially
Inevitable" Reduced Cable and Satellite Fees THE FACTS:
ValueVision's EBITDA improvement has been driven by a number of
factors, including broader product mix, improved channel
positioning, more compelling programming as well as the closely
negotiated and important management achievement of reducing cable
and satellite fees. ValueVision's customer base has grown by 132%
since 2008 and customers now purchase 35% more frequently. Since
the second quarter of 2012, ValueVision's revenue has grown nearly
three times faster than the competition.
SUPPORT VALUEVISION'S VALUE-ENHANCING STRATEGY BY VOTING THE
WHITE PROXY CARD
TODAY
Your Board would like to remind you that your vote is extremely
important -- no matter how many shares you own. Whether or not you
plan to attend the Annual Meeting, please sign, date and return the
WHITE proxy card
TODAY and discard all gold proxy cards that you may receive from
Clinton.
We thank you for your continued confidence and support of
ValueVision.
Sincerely,
Randy Ronning Chairman of the Board
Advisors
Jefferies LLC is acting as financial advisor and Simpson Thacher
& Bartlett LLP and Barnes & Thornburg LLP are acting as
legal advisors to ValueVision.
Your Vote Is Important, No Matter How Many Or How Few Shares You
Own
If you have questions about how to vote your shares, or need
additional assistance, please contact the firm assisting us in the
solicitation of proxies:
INNISFREE M&A INCORPORATED Shareholders Call Toll-Free:
(888) 750-5834 Banks
and Brokers May Call Collect: (212)
750-5833
REMEMBER: We urge you NOT to sign any Gold proxy card
sent to you by Clinton. If you have already done so, you have
every right to change your vote by signing, dating and returning
the enclosed WHITE proxy card TODAY in the postage-paid envelope
provided. If you hold your shares in Street-name, your
custodian may also enable voting by telephone or by Internet --
please follow the simple instructions provided on your WHITE proxy
card.
About ValueVision Media
ValueVision Media, Inc. operates as ShopHQ, a multichannel
retailer that enables customers to shop and interact via TV, phone,
Internet and mobile in the merchandise categories of Home &
Consumer Electronics, Beauty, Health & Fitness, Fashion &
Accessories, and Jewelry & Watch. The ShopHQ television network
reaches over 87 million cable and satellite homes and is also
available nationwide via live streaming at www.shophq.com. Please
visit www.shophq.com/ir for more investor information.
Forward-Looking Information
This release may contain certain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. Any statements contained herein that are not statements of
historical fact may be deemed forward-looking statements. These
statements are based on management's current expectations and
accordingly are subject to uncertainty and changes in
circumstances. Actual results may vary materially from the
expectations contained herein due to various important factors,
including (but not limited to): consumer preferences, spending and
debt levels; the general economic and credit environment; interest
rates; seasonal variations in consumer purchasing activities; the
ability to achieve the most effective product category mixes to
maximize sales and margin objectives; competitive pressures on
sales; pricing and gross sales margins; the level of cable and
satellite distribution for our programming and the associated fees;
our ability to establish and maintain acceptable commercial terms
with third-party vendors and other third parties with whom we have
contractual relationships, and to successfully manage key vendor
relationships; our ability to manage our operating expenses
successfully and our working capital levels; our ability to remain
compliant with our long-term credit facility covenants; our ability
to successfully transition our brand name; the market demand for
television station sales; our management and information systems
infrastructure; challenges to our data and information security;
changes in governmental or regulatory requirements; litigation or
governmental proceedings affecting our operations; significant
public events that are difficult to predict, or other significant
television-covering events causing an interruption of television
coverage or that directly compete with the viewership of our
programming; and our ability to obtain and retain key executives
and employees. More detailed information about those factors is set
forth in the Company's filings with the Securities and Exchange
Commission, including the Company's annual report on Form 10-K,
quarterly reports on Form 10-Q, and current reports on Form 8-K.
You are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date of this announcement.
The Company is under no obligation (and expressly disclaims any
such obligation) to update or alter its forward-looking statements
whether as a result of new information, future events or
otherwise.
Important Information
This release may be deemed to be solicitation material in
respect of the solicitation of proxies from shareholders in
connection with one or more meetings of the Company's shareholders,
including the Company's 2014 Annual Meeting of Shareholders. On May
9, 2014, the Company filed with the Securities and Exchange
Commission ("SEC") a proxy statement and a WHITE proxy card in
connection with the Company's 2014 Annual Meeting of Shareholders.
The Company, its directors and certain of its executive officers
and employees may be deemed to be participants in the solicitation
of proxies from shareholders in connection with the Company's 2014
Annual Meeting of Shareholders. Information concerning the
interests of these directors and executive officers in connection
with the matters to be voted on at the Company's 2014 Annual
Meeting of Shareholders is included in the proxy statement filed by
the Company with the SEC in connection with such meeting. In
addition, the Company files annual, quarterly and special reports,
proxy and information statements, and other information with the
SEC. The proxy statement for the 2014 Annual Meeting of
Shareholders is available, and any other relevant documents and any
other material filed with the SEC concerning the Company will be,
when filed, available, free of charge at the SEC website at
http://www.sec.gov. SHAREHOLDERS ARE URGED TO READ CAREFULLY THE
PROXY STATEMENT FILED BY THE COMPANY AND ANY OTHER RELEVANT
DOCUMENTS FILED WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION, INCLUDING INFORMATION WITH RESPECT
TO PARTICIPANTS.
1 Data calculated as of May 27, 2014.
2 techcrunch.com, May 7, 2012, Evine: Former HSN CEO Takes On
The Bigs, Launches Interactive Shopping Platform For Women
Contacts Media: Dawn Zaremba ShopHQ dzaremba@shophq.com
(952) 943-6043 O Tim
Lynch / Jed Repko Joele Frank, Wilkinson Brimmer Katcher
(212) 355-4449
Investors: David Collins / Eric Lentini Catalyst Global LLC
vvtv@catalyst-ir.com (212) 924-9800 O
(917) 734-0339 M
Arthur Crozier / Scott Winter / Jonathan Salzberger Innisfree
M&A Incorporated (212) 750-5833
Evolv Technologies (NASDAQ:EVLV)
Historical Stock Chart
From Jun 2024 to Jul 2024
Evolv Technologies (NASDAQ:EVLV)
Historical Stock Chart
From Jul 2023 to Jul 2024