Business Segments and Sales by Product Group

3 Months Ended

May 01, 2021

Segment Reporting [Abstract]

Business Segments and Sales by Product Group

(10)   Business Segments and Sales by Product Group

During fiscal year 2019, the Company changed its reportable segments into two reporting segments: “ShopHQ” and “Emerging Business.” In light of recent strategic shifts in the Company’s emerging businesses, the Company’s Chief Executive Officer, the chief operating decision maker, began reviewing operating results of the Emerging Business segment separately from its core business, ShopHQ. The chief operating decision maker is the Company’s Chief Executive Officer and Interim Chief Financial Officer. These segments reflect the way the Company’s chief operating decision maker evaluates the Company’s business performance and manages its operations. All of the Company’s sales are made to customers residing in the United States.

The Company does not allocate assets between the segments for its internal management purposes, and as such, they are not presented here. There were no significant inter-segment sales or transfers during the first three months of fiscal 2021 and fiscal 2020. The Company allocates corporate support costs (such as finance, human resources, warehouse management and legal) to its operating segments based on their estimated usage and based on how the Company manages the business.

ShopHQ Reporting Segment

The ShopHQ segment encompasses the Company’s flagship nationally distributed shopping entertainment television network. ShopHQ informs, promotes, demonstrates and sells its products to consumers using interactive video across multiple sales channels including linear television, online streaming, mobile and social platforms, brick and mortar retail, and OTT and CTV platforms such as Roku, AppleTV and Samsung connected televisions.

Emerging Business Reporting Segment

The Emerging Business segment consists of the Company’s early developing brands and business models. This segment includes the Company’s owned and operated consumer brands that include J.W. Hulme, Cooking with Shaquille O’Neal, Kate & Mallory, Live

Fit MD, and Christopher & Banks. This segment also includes the Company’s online marketplace brands OurGalleria.com and TheCloseout.com, and the Company’s media commerce services brands Float Left and i3PL. This segment also includes the recently launched niche television networks ShopBulldogTV and ShopHQHealth.

Net Sales by Segment and Significant Product Groups

	Three-Month Periods Ended
	May 1,		May 2,
	2021		2020
ShopHQ
Net merchandise sales by category:
Jewelry & Watches	$	43,254	$	39,402
Home		13,186		18,490
Beauty & Health		19,245		15,140
Fashion & Accessories		13,580		12,724
All other (primarily shipping & handling revenue)		10,597		8,043
Total ShopHQ		99,862		93,799
Emerging Business		13,341		2,035
Consolidated net sales	$	113,203	$	95,834

Performance Measures by Segment

	Three-Month Periods Ended
	May 1,		May 2,
	2021		2020
Gross profit
ShopHQ	$	40,363	$	34,955
Emerging Business	$	5,644	$	602
Consolidated gross profit	$	46,007	$	35,557
Operating loss
ShopHQ	$	(1,892)	$	(3,803)
Emerging Business		(159)		(1,832)
Consolidated operating loss	$	(2,051)	$	(5,635)
Depreciation and amortization
ShopHQ (a)	$	7,848	$	2,740
Emerging Business		469		165
Consolidated depreciation and amortization	$	8,317	$	2,905

Includes distribution facility depreciation of $942,000 and $1,014,000 for the three-month periods ended May 1, 2021 and May 2, 2020. Distribution facility depreciation is included as a component of cost of sales within the accompanying condensed consolidated statements of operations.