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September 18, 2014

Publishing News

Athlon Buying Parade; Most NY Staff Reportedly to Be Laid Off
Athlon Media Group announced on Wednesday that it has purchased Sunday newspaper magazine Parade and sister title Dash from the Newhouse family’s Advance Publications empire; terms were not disclosed. NY Post sources said editor-in-chief Maggie Murphy and CEO Jack Haire are among those who will lose their jobs when the New York-based publication pulls up roots and moves to Athlon’s HQ in Nashville, and that perhaps as few as 20 people will be offered jobs. Parade reaches about 32M households, compared to 23M for the #2 title, Gannett-owned USA Weekend. At its peak around 2000, Parade was generating annual profit of over $50M but is now believed to be in the red. It was especially hard-hit by drop in pharmaceutical ads as more blockbuster drugs lost their patents. Ad pages through the Sept. 14 issue were down 9.2%, at 273 pages, vs. the year-ago period. Annual revenue is estimated to be around $100M. Athlon is best known for its sports magazines. (According to its site, its monthly Athlon Sports Magazine has total circulation of 9M, and its 13 pre-season magazines with regional covers/coverage each sell between 100,000 to 400,000 newsstand copies.) Athlon already owns #3 Sunday magazine American Profile, which reaches about 12M households in mostly smaller markets. Athlon also produces monthly inserts Spry Living and Relish. With the change in ownership, Parade is trading one billionaire owner--brothers S.I. Newhouse Jr. and Donald Newhouse--for another, self-made businessman Spencer Hays.“Parade and Dash position the company to have the most effective and efficient advertising and retail activation reach of any media group across the US,” said Chuck Allen, Athlon's president and CEO. The acquisition will give the company a combined circulation of more than 38M across 1,600 newspapers.

Amazon Refreshes Kindle Line
Amazon hopes to woo new users with its just-announced updated Kindle tablets and e-readers. The Kindle Fire HDX 8.9 table now includes a powerful 2.5 GHz Snapdragon processor from Qualcomm and comes with the WPS Office app, essentially a way to create and edit documents from the tablet. The app is integrated with Amazon’s Cloud Drive, which will back up documents on Amazon’s servers. Amazon has also built a Fire Keyboard, which connects wirelessly to the HDX 8.9 tablet via Bluetooth. The aim seems to be to go after those who want to use a tablet as a workstation, instead of carrying a laptop--the same audience that Microsoft has tried to court with its Surface tablet. The Kindle Fire HD Kids Edition, $149, is an updated 6" Kindle Fire HD tablet with front-and-rear-facing cameras, an improved display and a better microprocessor. It also comes in an array of pretty colors, but the real hook is a two-year replacement guarantee. The device also allows for full access to “FreeTime Unlimited,” Amazon’s child-friendly section of videos, apps and games. For those who just want to read on their tablet, Amazon has a new $79 Kindle e-reader--its lowest-price option--and a new high-end model ($199): the Voyage, a thin, lightweight reader with an improved front light and touch-screen capability. Amazon shipped an estimated 200,000 tablets in Q2 2014, 22nd among tablet manufacturers worldwide, according to IDC. Apple sold 13.3M iPads over the same period.

Food + Wine Lays Off Six
Time Inc.'s Food + Wine magazine eliminated six positions on Friday--part of a company-wide mandate to streamline costs. According to a source with knowledge of the situation, six people on the editorial side lost their jobs, including a travel editor. That job would be eliminated and absorbed within the features department, but other roles would likely be combined. The restructuring will allow chief editor Dana Cowin to focus on digital, and put together a masthead that is trimmer and more nimble to traverse print and the Web, an insider told WWD. Time Inc. declined to comment. "It’s been no secret that Time Inc. CEO Joe Ripp is out to trim the fat in order to free up cash for other endeavors," writes WWD. "In February, he laid out the company’s strategy before it was spun off from Time Warner in June. Glossies from the recently acquired American Express Publishing group, which included Food + Wine, had been impacted by the CEO’s mandate. Ripp told staff via memo that the company would eliminate job 'redundancies' and streamline the organization...'We can continue the recent pattern of annual layoffs for years to come or we can get ahead of and then reverse this trend by developing the investment capital and the ideas to restore our business,' he offered. Rumor has it that more layoffs may come, as each Time Inc. title is currently in the process of setting its budget for the year ahead."

Spin Media Execs Let Go in Cost-Cutting Move
In the latest round of belt-tightening at Spin Media, Craig Marks is out as’s editor-in-chief after just three months. Tom Morrissy, the chief revenue officer and a veteran of OK! and Entertainment Weekly, was also let go, after five months on the job. Along with the cost cutting, the backers of Spin Media agreed to invest another $7.5M into the money-losing venture, on top of $10M in February.

Magazine Newsstand Apps All Set for iOS 8
Condé Nast, Hearst, Time Inc. and many other publishers have gotten into a rhythm regarding Apple’s iOS release schedule and are now ready whenever a new mobile operating system is about to be released. Yesterday, and again today, Time Inc. issued updates for its portfolio of digital magazine apps, 24 in total under the Time Inc. developer account (then there are those in the UK). Condé Nast, Hearst Magazines, Martha Stewart Living Omnimedia and other publishers are looking to avoid the mess they found themselves in following the release of iOS 7.   Last year, many publishers chose to take a wait-and-see approach to the new iOS as Apple was introducing a new look and feel. But what followed was a series of updates that needed to be issued to fix a long list of bugs. It is possible that publishers are finding the adjustment to iOS 8 easier (we’ll find out), or that they are simply ahead of the game. The digital publishing platforms such as Mag+, MAZ and PressPad also let their publishing clients know that they're ready for the release of iOS 8 and that clients can update their apps.

Opinion: Wolff Maintains Forbes 'Destroyed Itself to Save Itself'
In a lengthy piece titled "Empire Falls," Michael Wolff reviews the history of Forbes and its digital and editorial structure transformation since the death of Malcolm Forbes and in recent times in particular. "The family’s efforts to find a new buyer for the company--which began in November 2013 and came to an end in July--reflected a hyperzealousness to do almost anything to survive, a willingness, in the words of Dennis Kneale (one of the magazine’s former managing editors...), 'to destroy itself to save itself,'" Wolff writes. "While other publishing companies failed to move fast enough to embrace digital realities, this old-fashioned concern, trying to beat the increasingly bad odds for print businesses, may well have become the leading cautionary tale of buying too much into the digital dream." He continues: "Forbes now maintains a skeleton staff; in effect anyone can write for it, with little vetting or oversight or alignment with the brand. In some sense there is no Forbes brand anymore, at least no specific, coherent one. Almost anybody who writes for the magazine or website--PR people promoting something; consultants looking for clients; anybody selling anything, in fact; as well as oddball opinionists--can claim to have been endorsed by Forbes. [Chief editorial executive Lewis] Dvorkin, who is rail thin and has deep-set eyes that give him something of a Crypt Keeper look, recently told an audience at an event sponsored by PandoDaily, the tech news website, that traditional journalism was dead and hostile journalists should 'get over it.' Journalists, he said, 'need to understand the world is changing'...In an ironic sense—following Dennis Kneale’s credo of destroying to save—Forbes Media is even doing rather well. The combined readership of all the magazines (including 36 foreign editions of Forbes) is 6.1 million, and the website is approaching 30 million readers. Indeed, in parts of Asia the name still conveys a measure of business glamour and authority—so much so that the sale process that began last year whittled down the buyers to a set of Asian investment groups, each hoping to use the Forbes name in a regional branding spree."

Shanken Closes BtoB Mag Food Arts
In a rarity, Marvin Shanken has pulled the plug on one of his magazines, Food Arts. Although it was technically a B-to-B title, it had a circulation of 56,000 and was a keepsake for chefs and restaurateurs around the globe. Shanken, who started Cigar Afficianado and the Wine Spectator, had bought the magazine years ago from its founders, the husband-and-wife team of Michael and Ariane Batterberry, who stayed on board to run it at M. Shanken Communications. They had earlier founded Food & Wine, which they sold to American Express Publishing, now part of Time Inc. Michael passed away in 2010, but his wife was on board until the end, sharing co-publishing duties with Robert Mathias.

Opinion: Automated Buying of Reserved Media Taking Off
Standard programmatic media buying has a big drawback: insufficient transparency about which sites are being purchased, with attendant risks of being on low-quality sites. But new workflow automation tools are specifically designed to handle reserved media sales--the type of buys agencies execute all the time. This means availability of higher-quality, higher-impact ad units in automated marketplaces. All of which is driving an acceleration of programmatic buying, writes Richard Jalichandra, CEO of iSocket.

Study: Few Women 50 and Up Say They Trust Traditional Media
Marketing firm Influence Central and Vibrant Nation, an online community for women over 45, have a raft of new data on women over 50 with grown kids. The firms' joint study, based on a poll of 600 women, looks at how women relate to marketers who communicate with them online versus off; how they see themselves; and where they get their trusted information. 68% of women born between 1946 and 1964 said they consider themselves early adopters and independent-minded. 72% said they use a smartphone to visit social media sites, and nine out of 10 said they consider themselves "texters." 36% said they actually prefer to text rather than talk. 89% have a Facebook account, and 23% post to it daily. 67% said they're skeptical of offline ads and tune them out. About half think the actors that brands choose to represent women over 50 in ads look too young to be relatable. The researchers say that traditionally communications are drowned out by digital noise from blogs, ads, reviews, experts of various kinds. Half of the women said they pay attention to bloggers, not ads in magazines. Only 11% say they trust newspapers’ and magazines’ own content, and only 15% say they are more likely to purchase when they see a product showcased on TV.  Almost all said they seek online reviews and first-person recommendations. The most influential sites for reviews seem to be Target and Amazon, with more than 85% saying they trust reviews on those sites. Over half trust reviews on blogs and 53% trust third-party sites.










Retail News

Kroger Testing Click and Collect Kroger officials confirmed that they're testing a grocery pick-up service in Cincinnati. Modeled after Harris Teeter's "click and collect" at 150 stores in the Southeast, Kroger is now tinkering with the service at its Liberty Township store. Customers order groceries via the Internet, then drive up to pick up their order. Kroger bought Harris Teeter for $2.5B in January and has been studying the program for months, with plans to expand it elsewhere. The service is not yet available to customers at the Liberty Township store. Kroger is in such early testing, only associates are using it. "We are now in the embryonic stages of a click and collect test at one of our local stores--so early in fact, we just started testing with our associates," said Rachael Betzler, a Kroger spokeswoman. "As you know, Harris Teeter has successfully scaled a click & collect model in their stores and we are learning a lot from them about it. That model is an exciting opportunity for Kroger and our customers." Harris Teeter charges $4.95 per trip for their service or offers subscriptions for $16.95 for 30 days or $99.95 for one year of unlimited online shopping. Betzler said there isn't a launch date yet for when the service--even for testing--will be available to customers. Besides the Harris Teeter acquisition, Kroger also purchased for $280M in August a Florida-based, which sells nutrition and healthy living products via the Internet. For the last decade, Kroger has also been tinkering with an order online, deliver-to-home service at its King Soopers division in Denver. MNB: Keith Dailey, Kroger's director of media relations and corporate communications, said that while Harris Teeter has used MyWebGrocer to power its e-commerce operations, Kroger is using a combination of internal talent and outside companies to develop its site, though he declined to name the outside firms involved. Kroger is not saying how many SKUs it is making available on the site. Dailey said that there is a timeline and benchmarks by which Kroger will evaluate its successes, but declined to say what they are.

Grocery Outlet Gets New PE Owner
Grocery Outlet, an extreme-value retailer, said Tuesday it will enter “its next phase of growth” following a definitive agreement for the company and its management team to be acquired by affiliates of Hellman & Friedman, San Francisco. Terms of the transaction were not disclosed, nor would the company indicate to SN what the “next phase of growth” might entail. Grocery Outlet’s principal owner for the past five years has been Berkshire Partners, Boston. With sales approaching $2B, Grocery Outlet operates 214 stores in California, Idaho, Nevada, Oregon, Washington and Pennsylvania. An additional store is scheduled to open Thursday in Spokane Valley, Wash. The 16 stores in Pennsylvania operate under the Amelia’s Grocery Outlet banner, though the stores are in the process of being converted to Grocery Outlet (expected to be completed early next year). It was with the financial help of Berkshire that the company was able to expand through an acquisition into Pennsylvania in early 2012. Grocery Outlet, which relocated from Berkeley to Emeryville in May, offers branded grocery products at discount prices, with stores managed principally by local independent operators. Hellman & Friedman is an investment firm that says it focuses on “superior business franchises.” Its holdings cross many industries, encompassing marketing and information services--including Nielsen and Catalina Marketing--media, software, insurance, financial services, energy and health care.

Family Dollar Advises Rejecting Dollar General Tender Offer
Family Dollar Stores Inc. recommended shareholders reject a tender offer from Dollar GeneralCorp., reiterating its view on a $9.1B deal that it called “illusory” and likely to draw a lengthy antitrust review before investors can get their money.

Meijer Fined $2M for Reselling Recalled Products in 2011
Meijer Inc. has agreed to pay a $2 million fine as part of a settlement with U.S. Consumer Product Safety Commission over the resale of 12 recalled consumer products four years ago. Meijer distributed recalled products, several of which were children's toys, through a system Meijer operated with a third-party contractor, the agency said in a statement announcing the fine. A CPSC investigation, launched in March 2012, concluded Meijer received information about products handled by the contractor, but the retailer failed to take action to prevent distribution of recalled products. In total 1,692 individual units of recalled products were resold by the contractor between April 2010 to April 2011 to discount retailers, dollar stores, liquidation firms, flea markets and thrift stores nationwide at various prices. It is illegal under federal law to resell or attempt to resell a recalled consumer product. As part of the settlement terms, Meijer neither admits nor denies CPSC staff’s charges.

Wal-Mart Adding 4 Smaller Format Stores in Houston
Wal-Mart plans to open four new Neighborhood Markets in the next year and a half in the Houston metro area. Overall, W-M plans to open eight stores in the Houston area, which includes those Neighborhood Markets. At 40K-41K square feet, Neighborhood Markets are about a fifth of the size of a typical W-M supercenter. W-M varies the types of products offered and how they are marketed by location, said Todd Manley, VP general manager for Southeast Texas for W-M. Most of the new Houston market stores are slated for the suburbs, including Pearland, Cypress, Humble and Katy, with a Supercenter slated to open in the summer of 2015 near the Galleria. W-M holds 25.5 % of the greater Houston grocery market, with Kroger second and H-E-B third, according to The Shelby Report. W-M has 72 stores in the Houston area.

Sprouts Adding 10 Stores in Q1 2015
Sprouts Farmers Market will open 10 new stores in Q1 2015 in Scottsdale, Ariz.; Bakersfield and Daly City, Calif.; Birmingham and Huntsville, Ala.; Cumming, Georgia; Houston; Kansas City (Liberty), Missouri; Mansfield, Texas; and South Jordan, Utah. The retailer is new to Missouri and Alabama. These stores are in addition to other openings previously announced, including one slated to open next year in north Peoria. Sprouts is located in 10 different states and employs around 17,000 people. Since going public last year, Sprouts has rapidly expanded its footprint, entering new markets such as the Southeast. Sprouts recently announced its intentions to move its corporate headquarters to High Street in north Phoenix. In its most recently completed quarter, the grocer saw profits jump 141%.









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