Report: Amazon in Talks to Buy EVINE Live
Is e-commerce giant Amazon shopping to buy Eden Prairie-based EVINE Live Inc.?
Technology news web site TechCrunch posted a report on Tuesday citing an unnamed “industry source” that said acquisition talks have taken place between the Seattle-based online behemoth and the Minnesota-based home shopping channel.
In the wake of that speculation, EVINE’s stock shot up 31 percent in Tuesday trading to close at $1.06 per share.
But both companies are silent on rumors of any deal.
“We are not commenting on any speculations in the marketplace,” said Liz Joseph, spokeswoman for EVINE. In an email to Twin Cities Business, an Amazon representative declined to comment.
For its fiscal 2017 – ending on February 3, 2018 – EVINE reported net sales of $648.2 million, a 2.7 percent decline from the previous year. EVINE posted a nominal net profit of $143,000 for fiscal 2017. But for a company that has steadily lost money for years, the bottom line was an encouraging signal: it was the first profitable year for the company since 2007. EVINE posted a net loss of $8.7 million for fiscal 2016.
Although EVINE has long been a distant third in its industry to QVC and the Home Shopping Network, it has a large platform: it reaches more than 87 million homes through cable and satellite TV providers. And given EVINE’s low stock price, buyers could arguably acquire it at a steep discount: based on Tuesday’s closing price, the company had a market capitalization of roughly $69 million.
Mark Argento, senior research analyst with Minneapolis-based Lake Street Capital Markets, says that EVINE’s technology and infrastructure could be appealing for a potential buyer.
“It would make sense that strategically somebody would want to own these assets,” said Argento.
But is the Amazon speculation credible?
“Who knows?” said Argento. “You’ve got to be a little careful that we don’t get too carried away.”
Gene Munster of venture capital firm Loup Ventures, which has offices in Minneapolis and New York, made waves earlier this year with a prediction that Amazon would buy Minneapolis-based retailer Target Corp. in 2018.
Last week, news surfaced of an unexpected partnership between Amazon and Richfield-based Best Buy Co. Inc. Under the arrangement, Best Buy will be the exclusive brick-and-mortar retailer for Amazon’s latest generation of smart TVs.
Activist investors targeted EVINE, then known as ValueVision Media Inc., in 2014 and helped install Mark Bozek at the company’s new CEO. But turning around EVINE has proven to be a tough nut to crack. Bozek resigned in February 2016 after only 19 months at the helm.
Last year, Twin Cities Business took an in-depth look at Amazon’s expanding physical presence in the Twin Cities, which includes a large fulfillment center in Shakopee and a technology development office located in the North Loop area of downtown Minneapolis.