QVC expanding overseas as it cuts jobs

QVC, the West Chester-based multimedia shopping company, is expanding overseas and cutting jobs - at the same time.

The company founded in 1986 in the Philly suburbs now gets nearly a third of its revenue from outside the United States.

At the same time, changing habits, and a younger shopper adept at mobile devices, have forced the company to focus more online and on many more digital platforms.

Last year, $3.5 billion of QVC's $8.8 billion in net revenue came from e-commerce, half of which was from mobile platforms alone.

The company announced last month that layoffs would eventually affect 220 QVC workers, including 100 at its West Chester campus. Those cuts are tied to its international ambitions and growing investment in "global market platforms" that includes a new facility in Poland.

"We expect our transition to a global business services organization to take up to two years," QVC spokeswoman Diane Zappas said this week.

"Our business is growing across platforms from e-commerce, to mobile, to Apple TV."

The layoffs announced last month won't begin until January 2017, at the earliest. The 100 workers affected here make up about 1 percent of QVC's total U.S.-based workforce.

There are also 40 layoffs in the U.K., 70 in Germany, and 10 in Italy.

Poland will become a key center for the company.

"Many of the world's largest companies have a global business-services organization in Poland," Zappas said. "Poland has a high-quality business environment and multilingual workforce that can provide us with seamless support across our regions. The new organization will support areas of our finance, HR, IT and legal functions in the U.S., U.K., Germany, Italy, and France."

The recently announced layoffs come on top of the 147 jobs - mostly warehouse ones - that were pared late last year when the company permanently closed its jewelry-returns department and began handling all distribution and returns at its Florence, S.C., plant.

QVC is an $8.8 billion company with 17,000 employees that broadcasts in seven countries. It can be seen by nearly 360 million people on 13 channels.

In 2015, it shipped about 179 million products across its global markets, and introduced an average of more than 25 new items a day on its U.S. TV channels.

But although its penetration has grown, so has the competition.

"The competition and vast array of shopping options, particularly those offered through e-commerce and [mobile], are bringing pressure," said Boston-based expert Keith Jelinek, co-head of the retail and consumer practice at FTI Consulting.

"Over the past five years, the consumer has shifted away from a direct line of selling, via a cable-TV channel, to having the ability to surf multiple websites using various search vehicles to find the best value for items they are seeking," he said. "At the same time, the demographics have shifted, with a more adaptive millennial consumer, armed with iPads and smartphones, who have been raised in a more adaptive climate to embrace new technology to find and make purchases."

The Home Shopping Network (HSN) is one competitor. Online juggernaut Amazon debuted on Tuesday its own streaming home shopping network called Style Code Live.

Jelinek said QVC was making global moves to ensure it would survive in the new tech era.

"The best way to compete will be to focus on products that scream value, but can't be found anywhere else and price-compared, combined with finding a way to bring speed of delivery at a low or no cost, such as we have seen from Amazon and their Prime offerings," he said. "There could be an opportunity to move to some type of model where the offerings are so exclusive, a segment of the population will pay some sort of annual membership fee."

Robin Pilch, of Yardley, who dubs herself "the queen of shopping," has been a QVC shopper for 20 years. Repeat customers like her make up 90 percent of QVC's annual revenue.

"I have the option of returning an item, even though I have never returned one," said Pilch, a retired Philadelphia schoolteacher. She ordered a black, Judith Ripka spinel ring on Monday on QVC. Price: $99 on clearance, not including tax and a $4.99 shipping charge.

Ordering "is pretty quick, almost like it's automated," Pilch said. "I put my size and order number in, confirm what I want, and the party is done. It's really simplified."

Zappas noted that despite the new layoffs, QVC is hiring for about 500 positions in the U.S., half of which will be based in Pennsylvania.

"This summer, we are scheduled to open a new distribution center on the West Coast. The center is expected to employ more than 500 team members by 2018 and approximately 1,000 in total by 2020."

In QVC's recent earnings, the company reported a 3 percent increase in both U.S. and international sales, on a local currency basis.

She said last year QVC added the e-commerce firm Zulily to reach new customers and expand its mobile offerings.

Bare Escentuals, Vionic, Isaac Mizrahi, and Dyson vacuums on QVC are among the brands that sell briskly overseas, she said.

QVC recently launched C. Wonder in the U.S. - which features a collection of women's clothing, accessories, and jewelry "inspired by the exploration of global travel." Zappas said those products sold out within an hour of the launch. C. Wonder will be launched in the U.K. on Tuesday; Italy on March 20; and France in April.

sparmley@phillynews.com

215-854-4184

@SuzParmley