Eden Prairie-based ShopHQ posts first profit in years

The parent company of Eden Prairie-based television shopping channel ShopHQ posted its first profit in years following the company restructuring and several programming changes earlier this year.

For the second quarter ended Aug. 1, iMedia Brands Inc. reported a net gain of $1.1 million, compared with a $10.2 million loss for the same period last year. Sales dipped 5.3% to $124.5 million.

It is the first time the cable-shopping channel has been profitable since 2017. Its stock price jumped 20% Tuesday on the news, closing at $6.76.

ShopHQ, which dropped its Evine name last year, has been a distant third in the home-shopping category following competitors QVC and HSN.

But last year, iMedia began to make changes with a new executive team and investor group led by the Invicta Watch Group, which has infused the company with $10 million in cash (including a recent infusion of $4 million in April) since it took control of the company in spring 2019.

Behind the scenes, the company has worked to streamline the way its merchandising teams on-air producers work. Another large change has been ShopHQ's shift to have a fixed broadcasting schedule, including a weekly program with retired basketball star Shaquille O'Neal called "Cooking with Shaq."

Early this year, the company also fired Chief Financial Officer Michael Porter. In the first quarter, it also eliminated about 300 positions as a result of the pandemic, the company reported.

"One year ago, we defined a new innovative interactive media strategy and began to implement it within a leaner, more entrepreneurial culture," said Tim Peterman, chief executive of iMedia Brands, in a statement. "Today's financial report card reflects that success — smarter decisionmaking by a smaller group of entrepreneurial employees who love operational discipline and calculated risk taking."

In the first half of its fiscal year, ShopHQ launched 40 new brands that it now sells, which is the largest number of new product launches during any six-month period in the company's history. New products — including fashion and accessory brands like DKNY fashions and Karl Lagerfeld Paris ­— generated 19% of the company's total revenue for the first two quarters.

While iMedia Brands continues to monitor the effect of the coronavirus pandemic on its business, the company reported in its quarterly results on Tuesday that it believes "the pandemic's effect on the company will be reduced because we have a direct-to-consumer revenue model that serves customers who seek to buy goods from the comfort of their own homes."

Next month, iMedia Brands will launch its new health and wellness television retailing network, ShopHQHealth, its second niche television network after it launched its male-oriented Bulldog Shopping Network last fall.