NEW YORK, May 14, 2014 /PRNewswire/ -- Clinton Group, Inc.
("Clinton Group") announced today that its definitive proxy
materials for the ValueVision Media, Inc. (Nasdaq: VVTV)
June 18, 2014 annual meeting are
available. Clinton Group has nominated six independent
professionals for the Board of Directors of ValueVision and is
soliciting votes from fellow ValueVision shareholders for the
election of these individuals.
The Clinton Group also announced that it has produced a video
featuring its ValueVision Board nominees and that the video is
available on a new proxy campaign website it has launched today.
The video and Clinton Group's other proxy materials for the
ValueVision annual meeting can be accessed at
www.AddValueAndVision.com.
The Clinton Group nominees for the ValueVision Board of
Directors are:
- Thom Beers, the CEO of
FremantleMedia North America, the producer of "American Idol" and
"America's Got Talent" among other leading shows
- Mark Bozek, the former CEO of
HSN
- Ron Frasch, the former President
and Chief Merchandising Officer of Saks Fifth Avenue
- Tommy Mottola, the iconic former
Chairman and CEO of Sony Music Entertainment
- Bob Rosenblatt, the former
President of HSN and Tommy Hilfiger
and CFO of Bloomingdale's;
and
- Fred Siegel, the former SVP of
marketing at QVC
"We believe ValueVision can be a great and highly profitable
business, and one that creates tremendous value for shareholders,"
said Gregory P. Taxin, President of
Clinton Group. "We encourage all ValueVision shareholders to read
our materials and watch the video at
www.AddValueAndVision.com."
Along with the definitive proxy statement, the Clinton Group
will soon be mailing a cover letter to shareholders of ValueVision,
along with a gold proxy card. The text of the cover letter is
included below:
May 13, 2014
To Our Fellow Stockholders of ValueVision:
We are investors alongside you in ValueVision Media Inc.
("ValueVision" or the "Company"). We believe the Company has a
terrific collection of assets that can be operated in a way that
creates significant shareholder value. We are seeking to replace a
majority of the current directors of the Company to foster a new
vision and strategy for ValueVision that we believe can help us all
by generating sustained profits and share price appreciation.
We believe the Company and Board of Directors are not doing
enough with the Company's assets and that the current Board suffers
from a lack of ambition. Reading the Board's recent letters and
proxy statement, we cannot help but conclude that the current
directors are very content with the Company's market position and
financial performance. The Board touts, for example, that the
Company is now losing less money each quarter than it once
did. Color us unimpressed. The current Board has declared victory
while the Company languishes as a declining, third-place market
share player in a three-company market.
In our view, five years into the tenure of the Chief Executive
Officer, Keith Stewart, the Board
should only be satisfied by consistent profitability and sustained
value creation for shareholders. Instead, doing slightly less bad
is seemingly enough.
Not for us. We are disappointed by the performance of the
Company and its leadership team.
ValueVision stock trades today at approximately one-third the
average price for which it traded during the ten years
prior to Mr. Stewart's tenure. The Company is valued by the stock
market at a mere tenth of HSN and a thirtieth of QVC.
And, while ValueVision stock has moved sideways since January 2010, HSN and QVC have generated
significant value for their stockholders, including substantial and
growing profits.
The current Board seems to focus exclusively on the stock
performance during the first eleven months of Mr. Stewart's tenure,
from the financial crisis low in January
2009 to a rebound in December
2009. While it is true that ValueVision's stock price
bounced off its bottom of mere pennies per share during the period
of the financial crisis, so too did the stocks of scores of other
companies. Since then, however, ValueVision's stock price has been
essentially flat. For how long will the Board allow Mr. Stewart to
produce no returns for stockholders just because the stock
recovered from its financial-crisis bottom in the back half of
2009?
With respect to the fundamental financial performance of the
Company, the Board appears satisfied with declining losses, though
we know that shareholders cannot survive on losses, no matter how
small. And how disappointed must Mr. Stewart be? After all, Mr.
Stewart himself declared confidently that he could grow the
business into a $1.1 billion revenue
generator, producing more than $12 of
sales per year on average in each home in which the Company's
programming was available. Mr. Stewart repeatedly stated this goal
in 2009, 2010 and 2011. And, frankly, by many measures this was a
rather modest goal: HSN generates $24
of sales per year per home, and QVC substantially more. Even
ValueVision itself generated more than $10 of sales per home in every fiscal year
from 1999 to 2007.
But, alas, Mr. Stewart did not achieve his financial performance
goals. Or come close. Last year, the Company generated just
$640 million in revenue, or
$7 in sales per home, 40%
below his own target. Moreover, fully five years after Mr. Stewart
was put in charge, and despite his repeated predictions of
operating cash flow margins in double digits, the Company continues
to lose money.
While HSN and QVC have increased revenue, sales per home, gross
profit and EBITDA in the United
States compared with their pre-recession levels, ValueVision
is a diminished version of its former self; on all these critical
metrics, ValueVision is performing worse than it did in 2006. It is
no wonder, then, that the stock has not recovered to its 2006
year-end level of $13. Or even half
that.
Yet, the Board says it is satisfied and that we (and you) should
be too. Well, we are not.
We are, more precisely, gravely disappointed by the Company's
record of losing money in 20 out of the last 21 quarters. We do not
equate losing less money with success and we are concerned
about a stock price that has not recovered to even half of its
pre-recession level. We are worried about the lack of a plan to
reverse these trends or, seemingly, even a recognition of the need
for change. And, we are disappointed in the Chief Executive, who
has missed his own stated goals by a wide mark and has been lapped
by the industry leaders, who continue to grow their share through
innovation. (We note that Mr. Stewart missed the Company's target
performance by such a wide mark in three of his five years as CEO
that he failed to earn any annual incentive bonus in those
years.) If Mr. Stewart and the Board have a vision for break-out
performance and distinguishing the Company from its recent history
or its competitors, we have not heard it.
We think losing money every quarter while the stock price moves
sideways calls for a hands-on, energetic management team with a
detailed turnaround plan. Instead, the Company's Board permits no
fewer than nine of the senior officers (including the
President, the Chief Operating Officer, the Chief Financial Officer
and the Chief Merchandising Officer) to literally "phone it
in" one or two days per week while they "work" from their homes,
many more than 1000 miles from the Company's headquarters. Since
when do million-dollar-per-year executives only have to show up for
work a few days a week? Is it possible that the Company has not
achieved Mr. Stewart's own goals or stemmed the loss of market
share because the executive team is not in Minneapolis, working with their direct
reports, vendors, on-air talent and the finance team consistently,
Monday through Friday?
We fear this lackadaisical approach to corporate management is,
sadly, just part of the problem. The bigger issue is that the Board
and executive team do not have a strategy to break the pattern of
underperformance.
We do. We believe this situation calls for new directors with
deep industry experience and judgment.
The Clinton Group has therefore nominated six independent
professionals to serve on the Board of ValueVision. None of these
nominees is an employee of the Clinton Group, nor does any have any
other tie to our firm. They each do have notable and relevant
backgrounds and together can form the backbone of a fresh new
Board, implementing what we believe is a plan for success. We trust
that these nominees will serve the interests of all
shareholders.
Our nominees for the Board are:
- Thom Beers, the CEO of
FremantleMedia North America, the producer of "American Idol" and
"America's Got Talent" among other leading shows;
- Mark Bozek, the former CEO of
HSN;
- Ron Frasch, the former President
and Chief Merchandising Officer of Saks Fifth Avenue;
- Tommy Mottola, the iconic former
Chairman and CEO of Sony Music Entertainment;
- Bob Rosenblatt, the former
President of HSN and Tommy Hilfiger
and CFO of Bloomingdale's;
and
- Fred Siegel, the former SVP of
marketing at QVC.
In the enclosed proxy statement, you can read about the
backgrounds of our nominees. We have also produced a video and
posted it to our proxy campaign website, www.AddValueAndVision.com,
in which our nominees speak about the opportunity for ValueVision
to be an innovative leader and a profit engine. We encourage you to
review both, and to review the other materials we have posted to
our campaign website. You can also sign up there for regular
updates on our campaign.
Our nominees have an interest in improving the business results
and the stock price for all shareholders and they intend, if
elected, to move swiftly. No longer will senior executives be
permitted to fly in midday Monday, be chauffeured to the office and
their posh hotels and fly out Thursday afternoon – and certainly
not at shareholder expense! If elected, the nominees intend to move
decisively to hire executives that can dedicate the necessary time
in the Company's offices and studios to ensure the
successful implementation of a winning strategy.
Without radical or halting change, we believe the Company can be
transformed into a leader of multi-channel retailing, with live and
engaging programming, celebrity- and personality-backed,
proprietary brands, and high margin merchandise from a variety of
categories. We have in mind a Company that creates "retail theater"
in which carefully selected products are marketed over television,
social media and eCommerce sites in new, engaging and entertaining
ways. Think "American Idol" meets Amazon on the set of the "Good
Morning America."
The nominees are prepared to work hard to help create
shareholder value. Their interest is not in modest or incremental
improvements. Instead, they believe ValueVision possesses the
assets necessary to create an enterprise that could challenge HSN
and QVC for thought leadership and market share. We understand from
the nominees that they intend to examine carefully various steps to
move the Company in this direction, including:
- replacing the Chief Executive Officer;
- changing the mix of merchandise offered to customers, reducing
the percentage of merchandise in the jewelry, watch and electronics
segments (which have historically been characterized by high
selling prices and high return rates), and creating additional
vendor relationships with brands and manufacturers in other
categories such as beauty, health, fitness, fashion, accessories
and home;
- establishing a New York City
merchandising presence, enabling greater access to proprietary
product from celebrities, musicians, personalities and well-known
brands;
- broadcasting some live selling events from locations throughout
the world, including New York City
and Los Angeles, to facilitate the
acquisition and development of high margin, proprietary brands and
notable on-air talent;
- marketing the SHOP HQ brand and service through public
relations, off-asset marketing and through live events, promotions
and innovative use of multi-channel, social media; and
- innovating new programming approaches to distinguish the SHOP
HQ brand from those of rivals HSN and QVC (as well as other
eCommerce companies), including by adding programming that involves
integrated social commerce and cost-effective, shopping-centric
entertainment across multiple platforms.
ValueVision does not need to be a market-share losing, distant
third-place player in home shopping. It does not need to lower its
goals or accept a shrinking role in the industry. And shareholders
certainly do not need to accept mediocre performance, even if the
current Board is willing to do so. We and our nominees believe that
ValueVision can be an industry leader, exploiting its presence in
87 million American homes to innovate and create a great return for
shareholders.
Of one thing we are certain: We cannot reasonably expect that
the current CEO (five years into his tenure) or his executive team,
operating as they do from various far-away places during parts of
the week, to produce a substantially new and improved ValueVision.
At best, we believe we might see small improvements on the margin.
And maybe, sometime, a modestly higher stock price.
To be great and fresh and new, we are convinced that ValueVision
needs new leadership and a break with its past. As proven
executives and legends of the entertainment industry, our nominees
can bring unrivaled expertise (in home shopping, retailing,
eCommerce, merchandising, social media and television programming)
and key connections to the Company, for the benefit of all
shareholders. Most importantly, they can bring creativity and
innovation that is the hallmark of successful enterprises. We
believe they can help create a fantastic new business without
upsetting the existing business or alienating the Company's loyal
customers. I encourage you to watch the video at
www.AddValueAndVision.com to learn more about our plans directly
from our nominees.
Now is not the time for timid incrementalism. ValueVision needs
a bold approach to achieve great results for shareholders. We
encourage you, too, to expect more from ValueVision.
Please vote for our nominees.
If you have any questions or require any assistance in
delivering your proxy, please contact Okapi Partners LLC at
VVTV@OkapiPartners.com or (212) 297-0720 or Toll-Free (855)
305-0857. You can also contact the Clinton Group at
VVTV@Clinton.com.
Thank you for your consideration,
Gregory P.
Taxin
About Clinton Group, Inc.
Clinton Group, Inc. is a Registered Investment Advisor based
in New York City. The firm has been investing in global
markets since its inception in 1991 with expertise that spans a
wide range of investment styles and asset classes.
Important Additional Information
CLINTON RELATIONAL OPPORTUNITY
MASTER FUND, L.P., CLINTON
MAGNOLIA MASTER FUND, LTD., CLINTON RELATIONAL OPPORTUNITY, LLC, GEH
CAPITAL, INC., CHANNEL COMMERCE PARTNERS, L.P., CLINTON GROUP, INC., GEORGE E. HALL (COLLECTIVELY, "CLINTON") THOMAS D.
BEERS, MARK BOZEK,
RONALD L. FRASCH, THOMAS D. MOTTOLA, ROBERT ROSENBLATT AND FRED
SIEGEL (TOGETHER WITH CLINTON, THE
"PARTICIPANTS") HAVE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION (THE "SEC") A DEFINITIVE PROXY STATEMENT AND
ACCOMPANYING FORM OF PROXY CARD TO BE USED IN CONNECTION WITH THE
PARTICIPANTS' SOLICITATION OF PROXIES FROM THE STOCKHOLDERS OF
VALUEVISION MEDIA, INC. (THE "COMPANY") FOR USE AT THE COMPANY'S
2014 ANNUAL MEETING OF STOCKHOLDERS (THE "PROXY SOLICITATION"). ALL
STOCKHOLDERS OF THE COMPANY ARE ADVISED TO READ THE DEFINITIVE
PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO THE PROXY
SOLICITATION BY THE PARTICIPANTS BECAUSE THEY CONTAIN IMPORTANT
INFORMATION, INCLUDING ADDITIONAL INFORMATION RELATED TO THE
PARTICIPANTS. THE DEFINITIVE PROXY STATEMENT AND ACCOMPANYING PROXY
CARD HAVE BEEN FURNISHED TO SOME OR ALL OF THE COMPANY'S
STOCKHOLDERS AND ARE, ALONG WITH OTHER RELEVANT DOCUMENTS,
AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT
HTTP://WWW.SEC.GOV/. IN ADDITION, OKAPI PARTNERS LLC, CLINTON'S PROXY SOLICITOR, WILL PROVIDE COPIES
OF THE DEFINITIVE PROXY STATEMENT AND ACCOMPANYING PROXY CARD
WITHOUT CHARGE UPON REQUEST BY CALLING (212) 297-0720 OR TOLL FREE
AT (855) 305-0857.
INFORMATION ABOUT THE PARTICIPANTS AND A DESCRIPTION OF THEIR
DIRECT OR INDIRECT INTERESTS BY SECURITY HOLDINGS IS CONTAINED IN
THE DEFINITIVE PROXY STATEMENT ON SCHEDULE 14A FILED BY
CLINTON. THIS DOCUMENT CAN BE
OBTAINED FREE OF CHARGE FROM THE SOURCES INDICATED ABOVE.
SOURCE Clinton Group, Inc.