QVC: Shop ‘til You Drop

Welcome to the 216th Pari Passu Edition.

On April 16, 2026, QVC Group, Inc. (“QVC”) filed for bankruptcy in the Southern District of Texas. As one of the largest video retailers in the world, QVC sits at the intersection of media and retail. QVC shipped 182 million units in 2025, offering about 400,000 products in its ecosystem from brand partners. On the media side, the company reaches a combined 212 million homes through its domestic and international segments. The media conglomerate primarily reaches customers through cable television, but has been expanding its digital presence. The company’s two main TV channels, QVC and HSN, first began broadcasting in the United States in the 1980s.

Originally called Liberty Interactive, QVC began as a division of Liberty Media, founded by John Malone. Malone used this division as a holding company for various cable, retail, and venture assets. In early 2018, Liberty Interactive spun off its cable and venture assets into a separate company called Liberty Ventures. The remaining retail assets at Liberty Interactive were christened as the businesses we call QVC today.

At the time of the spin-off, QVC generated $14bn of revenue. What followed is a secular headwind that has suffocated the company over the last decade: people don’t watch as much television as they used to. As a result, QVC’s revenues have declined by 35% in 2025, and despite cost-cutting campaigns, operating leverage has resulted in steep margin contraction and eventually bankruptcy.

On August 6, 2026, QVC emerged from Chapter 11 with $1.3bn of funded debt. The reorganized equity is publicly traded under the ticker QVCG on the NASDAQ, valued at a ~$400mm market cap. Along the way, QVC has undergone various corporate reorganizations, asset sales, and liability management transactions, which we will cover below. QVC has a lot of history, but the capital structure today has been cleaned up significantly by the Chapter 11 filing, which also offers significant insights on the fate of preferreds in bankruptcy. 

Shopping is everyone’s favorite form of therapy. At its heart, QVC connects shoppers with what they want to buy. The company’s traditional medium was cable television, but the company has since expanded to social media and the internet. Today, QVC describes itself as a “live social shopping company” that sells a wide variety of consumer products across its various retail channels, such as cable television, websites, and social media. The assortment of merchandise falls into six major categories: home, apparel, beauty, accessories, electronics, and jewelry. Home, apparel, and beauty have historically been the three largest contributors to revenue.

The typical cable network business model derives revenue from two main sources: advertising dollars typically aired between programming and carriage fees from cable companies that pay for the right to carry the channel to their viewers. Specific carriage arrangements can vary, but cable networks are typically paid on a per-subscriber basis. In the case of channels like HBO, viewers pay additional fees for the premium channels. In other cases, the cost is bundled into the overall cable programming package (for example, $59.99 for access to a set of 200 channels). The main costs of the traditional cable network business model are programming costs to generate the content: paying labor (actors, actresses, and animators) and studio upkeep.

QVC flipped the script. The main business of shopping networks like QVC and HSN (a TV shopping network competitor that QVC fully acquired in 2017) is to sell products to anyone tuned in. The programming is relatively cheap to produce, and costs can be shared with brand partners. Instead of arrangements with cable distributors being a source of net revenue, QVC generally pays cable companies for distribution. QVC’s primary source of revenue is the products that it sells through its television channels.

QVC produces video programming that enables the company to resell products from its brand partners to consumers. While the company generally does not manufacture its own merchandise, QVC partners with vendors already at scale to sell to its captive audience. Examples of partner vendors include Apple, Birkenstock, Bose, Nike, and Skechers. The value proposition to brands like Nike who use QVC is that the company’s television channels, digital presence, and international scale make it a powerful “distribution and sales multiplier.” QVC acts as lead generation for the brand’s broader product offering. Many people who do not purchase through QVC may still end up purchasing the product through an alternative channel. In 2025, 97% of QVC’s worldwide sales were from repeat or reactivated customers. In order to deliver to customers, QVC maintains its own logistics network, including nine distribution centers and 15.3k employees. Prior to 2022, QVC owned many of its distribution centers, video production properties, and headquarters. However, from 2022 to 2023, QVC engaged in several sale-leaseback transactions to raise liquidity. While such transactions raised ~$1bn of net cash proceeds, these decisions also elevated the cost profile of the ongoing operating business.

The video programming, similar to any television show, is distributed through cable, satellite, and, now, online. Companies that distribute such content, like Comcast, DISH, and YouTube TV, are also known as Multichannel Video Programming Distributors (MVPDs). Video programming typically features salespersons showing off QVC’s wide variety of merchandise on the company’s shopping channels, QVC and HSN. Even though the company provides programming to MVPDs, QVC generally does not receive carriage fees for its programming; rather, revenue is primarily generated from the merchandise sales. QVC produces programming at its own studios; in the United States, the company’s main location is in West Chester, Pennsylvania.

Given the history of cross-ownership between cable distributors and the shopping networks, which we explore further in our company history section, QVC faced minimal competition on the television airwaves for most of its history. Cross-ownership incentivized distributors like Comcast to support QVC’s growth rather than potential competitors, since distributors owned equity in QVC. However, with the advent of the internet and social media, QVC has been facing increased competition as potential shoppers are inundated with new, interesting products that they might want to buy. QVC’s prior competition included advertisements in newspapers, radio, and at physical retail locations. Today’s wider landscape includes celebrity content creators, TikTok, YouTube, and many other mediums. Based on Pari Passu channel checks, one QVC former described the goal as needing to “make sure you distribute yourself everywhere consumers are consuming video” [1].

The other layer of retail competition that QVC faces is from large platforms like Walmart and Amazon. There are many more websites, large and small, that allow consumers to discover new items. QVC has historically been driven by impulse purchases after someone sees a product on a show. One of QVC’s strengths is the tenure and reputations that its shopping TV show hosts have built up with their fans over decades. Hosts like Lori Greiner (Shark Tank) and Jill Martin are trusted by their audiences to recommend products, and these personal relationships (including happy customers calling in live) have allowed QVC to mitigate some of the headwinds from online competitors.

The transition to other forms of content consumption is especially important given ongoing cord-cutting trends. The number of households that subscribe to cable television continues to decline in the mid-to-high single digits per year, presenting significant headwinds to QVC’s share of consumer attention. In the 1980s, cable television’s increasing penetration and reach of American households was a growth tailwind, but now represents a challenge as the cable television audience shrinks. Given when cable television was most popular, it’s no surprise that QVC’s most loyal customer base was predominantly older women above sixty years old, according to Pari Passu channel checks. The target acquisition age was 45-50 years old, and the new customer acquisition funnel tended to be someone who had recently undergone a life change of some sort, whether a relationship breakup, kids going off to college, or moving cities. The most loyal customers were those who liked the shopping television hosts the most and thus implicitly trusted the hosts’ shopping recommendations [1].

Besides domestic QVC (QxH, which stands for QVC US and HSN) and Zulily, the company also had two other main business segments, its International business and Cornerstone Brands (CBI). QVC’s international business is a similar business to its domestic operations, but serving a global marketplace including Asia and Europe. International markets generally require local sourcing teams that understand the unique product interests of each country, and QVC’s international segment has generally remained more resilient than its domestic business. This is due to international markets having less severe “cord-cutting” pressure than the United States.

Cornerstone Brands is an in-house home and apparel brand collection that was acquired as part of the HSN acquisition. The four major brands are Ballard Designs, Frontgate, Grandin Road, and Garnet Hill. For context, Ballard Designs is the most recognizable home furnishings brand of the Cornerstone collection and operates 17 retail locations in the United States. Unlike most of QVC’s product offerings, which are through partner brands, Cornerstone is self-owned, allowing QVC to capture more margin than reselling partner merchandise. While Cornerstone designs the furniture, Cornerstone is not in the business of manufacturing and instead contracts with third-party suppliers to actually implement their designs. 

The below image represents the company’s financial performance across all business segments. Gross margins have been stable, averaging 34%. Cost of goods sold expenses are significant, consisting of wholesale product costs, freight rates, and warehousing costs. EBITDA margins have compressed from mid-teens historically to more recently averaging 10% from FY2023-2025. Operating expenses primarily consist of commissions, order processing and customer service costs, credit card processing fees, and telecommunications expenses. Other major P&L cost areas include advertising and SG&A overhead. Other major cash outflows include capital expenditures for QVC’s logistics network and cash payments for television distribution.

Overall, QVC’s cost structure is primarily variable, as a result of the cost of goods sold paid for the merchandise that the company resells. Since physical store locations are minimal, the company requires lower inventory levels and capex than traditional brick-and-mortar retailers. However, there is still ~$2-3bn of operating expenses that the company incurs beyond COGS, including marketing & advertising costs, commissions, and programming production costs.

Before diving further into what QVC looks like today, let’s go back to its roots. The original QVC television network was founded in 1986 by Joseph Segel. In exchange for investment stakes in the television channel, cable companies like Comcast agreed to carry the station to its viewers. This was a common arrangement between cable distributors and cable channels at the time, and the growth of networks like QVC & HSN was highlighted in Cable Cowboy, a book about the beginnings of the cable industry. Contemporary brands like Sears partnered with QVC to represent them exclusively through cable television, at the time, a new and growing medium to reach American consumers.

There was a massive and growing audience for this advertising channel in the 1980s and 1990s. QVC revenues increased rapidly from $193mm in 1989 to $1.1bn in 1993 [2]. The company grew so large that, in 1993, the company even launched a hostile bid for Paramount, eventually losing to Viacom. Upon news that QVC lost its bid, Barry Diller, who controlled the company in conjunction with Liberty Media and Comcast, said “They won. We lost. Next.” [3]

In February 1995, Comcast and Tele-Communications Inc. (TCI, the cable company owned by John Malone) completed a joint acquisition of the QVC shares they didn’t already own, valuing the company at $2.2bn. By 2003, when Comcast sold its 57% stake in QVC to Liberty Media (TCI’s media division), the company’s valuation had soared to $14.1bn. By then, QVC was generating $4.4bn of revenue [4]. In 2011, Liberty Media changed its name to Liberty Interactive.

QVC began collaborating with YouTubers and beauty vloggers as early as 2010 and began its online website presence even earlier in 1996. As shopping channels have expanded beyond linear television to the internet and social media, QVC has expanded its own channel offerings, both internally and through acquisitions. In 2015, QVC acquired Zulily, a specialty online retailer, at an approximate $2.1bn enterprise value, or an estimated 27x EBITDA multiple. At the time, Zulily had 5 million active customers and 15k brands of children’s apparel, women’s apparel, toys, infant gear, and home decor. In 2017, QVC acquired the remaining 62% stake that it did not already own in HSN, its main competitor in video retailing, at a total enterprise value of $2.6bn.

The core assets that comprise what QVC is today were separated from other parts of Liberty Interactive in 2018, when Liberty Interactive split off GCI Liberty. GCI Liberty held many of the company’s cable and telecommunications assets. The remainder of Liberty Interactive’s assets then rebranded as “QVC Group” to better represent the video retailing assets that stayed behind and continued to trade as a standalone firm; this name change included the former Liberty Interactive stock tickers changing to QRTEA and QRTEB, reflecting Class A and Class B shares of QVC [5].

QVC has had a long pathway to its eventual bankruptcy filing in 2026, detailed in Judge Alfredo Perez’s memorandum decision confirming QVC’s reorganization plan. Its history of various liability management exercises later became the subject of litigation, so we cover some of the most pertinent events on the company’s path to distress.

We will dive into QVC’s various credit silos and corporate structure in a later section, but provide a preliminary overview here to provide context for earlier liability management actions. The organizational structure generally consisted of three main silos: the publicly listed parent company (“ParentCo”, also known as QVC Group, Inc.), a middle entity (“LINTA”), and the QVC operating subsidiaries (“OpCo”). Owned by ParentCo and LINTA, the Cornerstone Brands business segment (“CBI”) was held outside of the existing credit groups. QVC Global Holdings I, Inc. (“QVC Global”) is an entity within the OpCo credit group.

2020 Restructuring

To start, let’s understand where QVC Group stood financially before a series of refinancings. As shown in Figure 4, QVC had $7.3bn of gross outstanding debt. There was $5.1bn outstanding at OpCo, implying 2.5x leverage through this silo; there was an additional $2.2bn of debt at LINTA, implying 3.5x total leverage.

Specifically, QVC, through LINTA’s entity, had four material exchangeable debentures outstanding. QVC executed a “multi-jurisdiction, 15-step restructuring” in December 2020 (“2020 Restructuring”) to address certain liabilities associated with their LINTA exchangeables [6]. The “multi-jurisdiction” element of the 2020 Restructuring came from mitigating tax risk from legislation coming into effect in the E.U., U.K., Germany, Italy, and Australia. The 15 steps were not individually called out in QVC’s disclosure statement, but generally referred to intercompany note retirement, eliminating defunct subsidiaries, reducing currency exchange risks, and making additional subsidiaries available as co-obligors on certain debt obligations. Before diving into what the company did, it’s worth discussing the nature of exchangeable debentures.

Exchangeable debentures are a form of debt that is classified as “contingent payment debt instruments.” While such debt includes a fixed interest coupon, the debt is also "exchangeable" into a set number of shares of a specified stock at the holder’s option. The debt is typically issued with a schedule until the exchangeable debenture’s maturity that projects future price appreciation of the underlying stock, based on historical returns. From a tax perspective, the IRS allows the company to deduct interest expenses associated with the total return to the debenture holder (thus including projected stock appreciation), not just the cash coupon. Of course, if the actual stock price appreciation does not materialize, then the excess interest deductions will cause a future tax liability when the exchangeable debentures are retired.

One issue, the 3.5% Exchangeable Senior Debentures due 2031, was exchangeable into 5.2598 shares of Motorola Solutions, a separate company operating in the mobile communications space. At the time of its issuance, the 3.5% Exchangeables due 2031 were linked to shares in Motorola held by QVC. Motorola Solutions had not performed in line with the initial schedule when the exchangeables were issued, so QVC’s use of exchangeable debentures had accrued a substantial deferred tax liability. This is because tax-deductible interest from QVC’s exchangeables is higher than the cash coupon on a year-to-year basis. However, upon redemption, the deferred tax liability comes due. In order to deal with this issue, specifically the retirement of exchangeables linked to Motorola stock due 2031, the company made QVC Global a co-obligor under the exchangeables and entered a payment reimbursement agreement whereby QVC Global agreed to reimburse LINTA for payments it made on its exchangeables. As part of this 2020 Restructuring, the $1.825bn promissory note from LINTA to QVC Global was entered into. Note that the Motorola-linked exchangeables are not to be confused with the LINTA exchangeable notes linked to T-Mobile and Lumen stock, which have a separate deferred tax liability. The current LINTA creditor group disputed certain issues arising from the 2020 Restructuring, but settled such concerns as a result of the intercompany settlement reached during QVC’s Chapter 11 process.

In summary, QVC, through LINTA, first issued exchangeable debentures to take advantage of related tax benefits. However, the conditions on which the tax benefits were conferred did not materialize, resulting in later tax liabilities, which were addressed through the 2020 Restructuring. The OpCo silo, through QVC Global, was the main source of cash generation to deal with the tax liabilities, so it lent the money to LINTA to deal with the potential cash tax payments.

2021 Refinancing

The next major evolution in QVC’s capital structure was in 2021, as a result of QVC’s revolving credit facility coming due in December 2023.