
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, March 3, 1992                   TAG: 9203030105
SECTION: BUSINESS                    PAGE: A-3   EDITION: METRO 
SOURCE: GEORGE KEGLEY BUSINESS EDITOR
DATELINE:                                 LENGTH: Medium

IF `LIONS' MERGE, WHAT HAPPENS TO HOME SHOPPING IN SALEM?

If Home Shopping Network merges with its chief rival, QVC Network Inc., as they suggested last week, analysts have questioned whether they'll continue to operate both Virginia distribution centers, in Salem and Suffolk.

Both companies called their talks "exploratory discussions" and declined to comment on their progress or substance.

One of the order-filling centers might close if the two companies consolidate, said James M. Meyer, an analyst for Janney Montgomery Scott Inc., a Philadelphia securities brokerage.

Home Shopping has about 555 employees in Salem; its average work force there is about 650. QVC employs about 425 people in Suffolk and another 925 at a telephone order-taking center in Chesapeake.

"I think it's rational that you wouldn't have both of them," Meyer said.

But the talks were being termed by Wall Street analysts as "very preliminary" because the Federal Trade Commission often must determine whether competition is jeopardized by such mergers.

"It's hard to see these two lions lying down together. I'd be surprised if this finally goes through," said an unidentified analyst quoted by Investor's Business Daily.

Roy Speer, Home Shopping chairman, and Joseph Segel, QVC chairman, "both have a reputation for calling their own shots," William F. Costello, chief financial officer for QVC, told the investor newspaper. "It would have to be considered who will wind up running the merged company. But we still don't know if we will merge."

A merger of the two billion-dollar outfits "could be a very monstrous, very exciting company," Peter Siris of UBS Securities in New York told the St. Petersburg Times. Home Shopping would bring top technology to the merger and QVC would contribute better relationships with cable companies.

Home Shopping, based in St. Petersburg, Fla., has programming reaching 35 million homes and another 25 million subscribers see the shopping features by cable.

QVC, of West Chester, Pa., has 40 million households, including 8 million who get a new fashion channel. Investor's Business Daily estimates about 12 million households see programming from both companies.

Last year, Home Shopping completed a $4.2 million addition of 230,000 square feet to its Salem center. That gave the company the ability to ship an average of 1 million packages a month.

For a brief period in 1986 and 1987, Home Shopping greatly expanded its Salem work force. It hired about 2,000 part-time telephone operators who lost their jobs when the telephone operation was moved to Florida.

Home Shopping has been trying to reduce its debt of $271 million by selling its subsidiary, Precision Systems Inc. - a telephone answering service - and its 11 UHF stations.

QVC, considered by some analysts as better operating, has picked up momentum after overcoming problems from its 1989 acquisition of CVN Cos., a competitor.

Landmark News Service contributed to this story.

by CNB