The billionaire at the center of a high-profile conflict with Sports Illustrated is facing new allegations. This time, it’s about his long-established shopping platform, HQ, which is reportedly accused of selling merchandise without compensating suppliers.
Jewelry from Morris & David, including bracelets, rings, and necklaces, has had significant sales on ShopHQ over the last year. However, the New York-based jeweler claims he hasn’t received any payment for $200,000 worth of goods, all tied to Manoj Bhargava, the founder of 5 Hour Energy and the owner of Arena Group, which publishes Sports Illustrated.
Suppliers for ShopHQ have reported tightening measures early last year under Bhargava’s leadership, leading to widespread complaints of “gangster-like” behavior, according to the brand’s owner. In what seems to be an unfortunate trend, Bhargava’s ownership has seen a dramatic reduction in the staff at Sports Illustrated.
“I’ve worked with them for 25 years, generating over $150 million in sales,” said Samuel Behnum, the owner of a Long Island jewelry business. “But I’ve lost money—$30,000, to be exact. Right now, we’re not doing any business with them.”
Last spring marked a turning point when ShopHQ laid off hundreds of employees and ceased payments to suppliers, coinciding with a failed attempt to expand into online marketing, including video on demand and live-stream shopping.
One commentator described it as an awkward blend of Instagram shopping and television sales. Competition has intensified, particularly with younger hosts well-versed in e-commerce platforms like Amazon Live and TikTok shops.
ShopHQ went offline entirely in April. During its operation, Eroshalmi asserted that he shipped around $200,000 worth of jewelry to ShopHQ’s headquarters in Minnesota.
Often present at ShopHQ’s studios to showcase his jewelry, Eroshalmi soon faced silence when ShopHQ went dark.
After months of attempts to reach out for payment, which consisted of items like a $9,995 tennis bracelet and a $1,795 diamond ring set, he still hasn’t succeeded.
In October, Bhargava relaunched ShopHQ after shifting control from IV Media to Arena Group. The details of this transfer remain undisclosed.
Ignoring Eroshalmi’s repeated requests for payment for nearly $290,000 in jewelry, ShopHQ resumed selling products online, including items from Morris & David, although only 14 were left on its site as of Tuesday.
“I felt furious seeing my products for sale without any payment,” Eroshalmi disclosed, adding that he checks the site daily.
This relaunch hasn’t escaped Eroshalmi’s notice. “He’s the same owner; he’s just avoiding responsibility,” he claimed.
According to distressed asset expert Adam Stein Sapir, Bhargava has the financial means to meet ShopHQ’s obligations but seems reluctant. “When this behavior gets around among vendors, there will be repercussions,” he noted.
Unfortunately for Eroshalmi, the future of his business, which has a long history, is precarious. “I owe lots of people for that product,” he expressed.
A beauty wholesaler based in Georgia is also pursuing legal action against IV Media for $51,000 in unpaid fees linked to sales through ShopHQ’s network.
IV Media has denied any wrongdoing in court proceedings. ShopHQ, originally known as ValueVision since its launch in 1990, has undergone several name changes and is one of the pioneers of TV home shopping.
At its peak, the company boasted revenues of about $500 million and reached around 80 million households, putting it in direct competition with QVC and HSN. However, the rise of e-commerce has significantly impacted the TV shopping market. Now, ShopHQ primarily operates via social media, YouTube, and its website.
Behnum shared, “While there have been management changes and delayed payments in recent years, most of the time it has been a solid business. We often had to ensure our products because if not, we would have had to increase prices substantially.”
