Manoj Bhargava — the billionaire owner of 5-hour Energy drinks and a slew of other companies — admits he doesn't know much about women's fashion, jewelry or beauty products, but he is so confident in the home shopping channel concept that he will invest at least $20 million in the ShopHQ business he recently bought out of bankruptcy.
Bhargava, the new owner of the Eden Prairie-based shopping network, said he feels strongly about his ability to "outmaneuver the bigger guys" and steer the troubled iMedia to a path of growth.
"We are not going to be a mini-me to QVC," Bhargava said. "We are not going to do the same stuff they're doing. That would make no sense. I've always been the guy who comes in at the end, the little guy. It's like 5-Hour Energy. Monster and Red Bull owned the business, and everybody said, 'You're nuts,' and we came in and took 10 percent [market] share. I kind of enjoy that."
Bhargava has already spent $55 million to buy ShopHQ and other assets of the former iMedia company out of bankruptcy and has made the company private. He plans to keep the operations in the Twin Cities.
Along with those unfamiliar items that are the mainstays of the home shopping ecosphere, Bhargava also acknowledged not knowing much yet about some of the brands he just bought. That includes Christopher & Banks women's clothing line and J.W. Hulme leather bags and luggage.
Yet he bought these assets through IV Media, a subsidiary of his suburban Detroit-based Innovation Ventures, which owns 5-hour Energy. And these are just the latest in his current shopping spree.
Through affiliates of Innovation Ventures, he has made deals for TV and radio stations and is negotiating a majority ownership position in the Arena Group, which has 265 media brands including Sports Illustrated and Parade magazine.
While the companies will function independently, Bhargava said the different affiliates could collaborate. IV Media has already started broadcasting ShopHQ on TV stations it operates.
"Under new ownership, both companies will be well-positioned to grow and achieve great success together well into the future," said James Alt, iMedia's chief transformation officer, in a statement. "With IV Media's partnership, iMedia will continue delivering customers the diverse range of brands they desire through captivating content."
Bhargava said he saw iMedia as an investment opportunity after learning of its bankruptcy about a month ago. After a visit to the Eden Prairie offices, Bhargava made an offer to buy it that same week.
One of the factors that first attracted Bhargava to iMedia was its ability to receive real-time feedback from customers on a range of products based on how they are selling on ShopHQ. He said he could already see cross-promotional potential for some of Innovation Ventures' existing items, like an under-development hydration product.
"What they have is really great because they have a way to sell product, and they have direct access to a customer," Bhargava said of ShopHQ. "You can't beat that."
The IV Media deal came as a bit of a surprise after iMedia announced in July it was in a sales agreement with RNN National Media Group for $50 million. Bhargava confirmed the deal included the firing of the company's old senior management team, including chief executive Tim Peterman.
Bhargava did not share any other plans for personnel changes, other than saying several people had been hired and he was at the company for a town hall meeting last week and "really liked the group of people who were the base of the company."
Bhargava said, for now at least, he'll be the one in charge of ShopHQ, which employs about 500 people. Still in very much a listen-and-learn mode, he said he has given his email address to everyone in the company and encouraged them to share their best ideas.
Bhargava couldn't give a timeline for when new programming changes and other business alterations could occur. He said he is concentrating on putting the business on its feet first.
For example, he is connecting with vendors, surveying customers and finding out the underlying issues with iMedia's business model.
"There's a bunch of fires," Bhargava said. "We're putting them out. ... The first thing is: Make sure your house is not burning down. Then you can add improvements to it."
He said he is optimistic on the future of retail and home shopping.
"I personally think there's a great future," Bhargava said. "But you just have to have the right product mix. You have to have the right strategy and the right dedication to it. If you do it the same way you did it 50 years ago, chances are you probably missed some things."