Action Performance Companies and QVC Announce Agreement
18 September 2000
Action Performance Companies Inc. and QVC Inc. Announce Outsourcing and Exclusive Supply Agreement
PHOENX--Sept. 18, 2000--Action Performance Companies Inc. Monday announced a ten-year outsourcing and exclusive supply agreement with e-commerce leader QVC Inc. in which QVC will assume responsibilities for the day-to-day marketing and distribution operations of the Racing Collectables Club of America (RCCA(TM)).RCCA is an auto racing die-cast collectibles club with close to 200,000 members that sells products through monthly catalogs under the RCCA and Elite(TM) trademarks. Per the agreement, Action Performance will be QVC's exclusive supplier for motorsports memorabilia offered by the company, and QVC will be the exclusive direct-response television retailer for Action Performance.
QVC's assumption of the day-to-day operations of RCCA includes the production of the RCCA monthly catalog, promotion of the club and its products, inventory warehousing, order processing and order fulfillment. QVC will also have the exclusive opportunity to sell RCCA products over interactive television after the initial sales window reserved for RCCA members has expired.
Action Performance will continue to be responsible for the acquisition and management of third-party licenses, product selection, development and manufacturing. In addition, Action Performance will retain ultimate control over the decision-making processes regarding suggested retail pricing and limited edition production quantities of RCCA products.
"Aligning ourselves with a strong company like QVC is another step in Action's plan to return to profitability by focusing on those activities we do best and aligning ourselves with companies who have expertise in other areas," said Fred W. Wagenhals, Action Performance president, chairman and chief executive officer.
"As a virtual shopping mall that never closes, QVC affords Action the opportunity to get our RCCA and Elite products seen around the clock by millions of shoppers worldwide. I am excited about having a world-class organization such as QVC on board."
"We are excited to join forces with Action Performance, the preeminent source of the most sought-after motorsports collectibles, who clearly sets the standard of quality for serious motorsports collectors and fans," said Darlene Daggett, QVC's executive vice president of merchandising/sales & product planning.
"We look forward to our long-term relationship and the opportunity to grow our businesses together."
"By outsourcing the day-to-day management of RCCA and the distribution of its products, Action is benefiting from QVC's established sales, marketing and distribution capabilities as well as its leading-edge technological infrastructure," said David Martin, Action Performance chief financial officer.
"We are confident that this alliance will prove to be advantageous not only for Action Performance and QVC, but also for its licensees and the entire motorsports collectibles industry. We believe that this agreement will enhance Action's ability to increase revenues and is anticipated to be accretive to operating income in fiscal 2001."
The new agreement marks a deepening relationship between the two companies that began six years ago and has grown steadily since. Both companies will continue to work in close conjunction with The Source International Inc. (TSI), a Winston-Salem based sports marketing firm which has helped QVC develop a significant motorsports collectibles business.