Electronics hot, jewelry cool for QVC

Think QVC and the image that comes to mind is likely a TV host selling some type of jewelry.

Now when you’re selling consumer goods 24 hours a day, 364 days a year, a network can’t live on jewelry alone. But it’s been a key driver of the West Chester cable shopping channel’s business for years.

That’s why it’s a little surprising to learn that electronics is QVC’s most popular business right now.

“That seems to be one of the categories that has held up better for us than other categories,” QVC CEO Michael George said during a Morgan Stanley conference call yesterday.

Unfortunately for QVC, electronics is a low-margin business, meaning it makes less profit per sale than jewelry, which is its highest-margin business. QVC doesn’t disclose what those margins are.

QVC is the engine that runs Englewood, Colo.-based Liberty Media Corp. For its nine months ended Sept. 30, QVC generated revenues of $5.7 billion, or nearly 80 percent of Liberty Media’s consolidated revenue.

Like its storefront kindred, QVC has been seeing its financial results hurt by the slide in consumer spending.

No silver linings

Among the many snapshots of the U.S. economy released yesterday, the Organization for Economic Cooperation and Development was particularly downbeat.

“The U.S. economy is facing extremely difficult conditions,” the OECD said in its semi-annual economic outlook. The report says the current environment is “the most serious recession since the early 1980s.”

And the group points the finger squarely at the financial crisis, saying that how bad things get depends on how quickly the financial crisis is overcome.

“The unfolding events since mid-2007 have highlighted the need for a major overhaul of financial regulation and supervision,” the report says.

I don’t think anyone disagrees, but we need to get beyond the daily announcements from the Treasury and Federal Reserve about new efforts to jump-start credit markets that remain stalled.