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September 30, 2014

Publishing News

Hearst Puts Seventeen, Cosmo in Group Led by Cosmo Execs
Hearst Magazines has named Joanna Coles editorial director of Seventeen, in addition to her role as editor-in-chief of Cosmopolitan. Donna Kalajian Lagani, SVP, publishing director of Cosmopolitan and Cosmo For Latinas, will also assume marketing and publishing responsibilities for Seventeen. Seventeen’s editor-in-chief of seven years, Ann Shoket, will step down “to pursue other media projects,” including consulting on a new, as-yet-unannounced product at Hearst, said the company. Her replacement at Seventeen will be announced in coming weeks. Hearst said the two titles will now comprise a new millennial-targeted women’s group that reaches nearly 60M readers across print and digital. “Joanna and Donna are the ultimate dream team, and they’ve taken Cosmopolitan to new heights, across multiple platforms—print, digital, e-editions, social media, consumer products and, soon, live events,” said Hearst Magazines president David Carey. “Like Cosmo, Seventeen speaks to an audience of millennial women, and while their readers are at very different life stages, they share a love of style and entertainment, and value independence and equality. Both brands enjoy strong advertising support from a similar group of national marketers across a range of categories, as well.” Other executive changes accompanying the Seventeen shifts: Jayne Jamison, VP, publishing director of Seventeen since 2003 and Redbook since last year, will become the new publisher of O, The Oprah Magazine. Replacing Jamison at Redbook is Sue Katzen, Cosmo’s current associate publisher, advertising (and former associate publisher of Cosmo’s now-defunct teen spinoff Cosmo Girl). Jill Seelig, the publisher of O, has been named Hearst’s SVP, corporate development, magazine publishing.

People, BH&G Lead Top Magazines by Total Audience, Per New MPA Report
Mashable lists the top magazines by total audience, per MPA's new Magazine Media 360 brand audience report: People, Better HOmes and Gardens, CTme, Allrecipes, National Geographic and Forbes. Looking at video audiences, GQ leads, followed by Wired, Glamour, People and Teen Vogue. The report data show that total, cross-platform combined audience for the magazines tracked has grown by 10% since August 2013. Their total mobile audience has nearly doubled, and their total video audience has grown by more than 50%.

Women's Health Yields 43K Paid Subs Via Beauty Samples Packages
Hundreds of thousands of Birchbox subscribers receive packages bearing samples of cosmetics and "lifestyle" products. One of Birchbox's most successful partnerships was the April 2013 box with Rodale's Women's Health. Birchbox subscribers who opted to receive this package got a box curated by the magazine around beauty routines, which included a one-year subscription to WH. The magazine also wrote an in-book feature about the box and held a blogger and Birchbox customer event with Barry's Bootcamp, further promoting the product to its audience of 32M readers. In total, 24M social media impressions were made. It led to one of the magazine's largest acquisition campaigns, yielding 43,000 new paid subscribers. WH prides itself on trying to infuse actionable advice, and having physical samples to base editorial on helped build on the publication's brand message and create an interactive experience for readers, said editor-in-chief Amy Keller Laird. The success of the first box—it also led to a 10 percent increase in subscriptions to Birchbox—lead both to revisit their partnership in July 2014. The second box, this time focused on health and fitness, is on track to bring in more than 50,000 new subs. To date, 5M impressions have been generated by posts of UGC images of the box itself, and another 22M by people joining the #powerupchallenge. And Birchbox reported a 10% increase in subs again this time.

Conde Nast Entertainment's Ostroff on 'The Age of the Selfie Brand'
Condé Nast Entertainment chief Dawn Ostroff, who came from the CW network, oversees the new Condé portal The Scene, where she is attempting to transform the company’smagazine brands into new digital formats for a younger audience in the age of what she calls “the selfie brand.” So far, she appears to be successful--the portal’s 14 channels have already collectively generated 1.5B views. Skewering stereotypes about digital video, Ostroff said the millennial audience demands complex storytelling. “There’s a huge audience for incredibly rich, layered content,” she said, citing "The Hunger Games" and "Twilight." This gives content creators the opportunity to create elaborate back stories with depth, like the immersive worlds of video games, she explained. Millennials want individualized experiences that are easy to share, as sharing is the lynchpin of selfie branding, she added. They also want real-world back stories and, most of all, access. The future of the talk show format Ostroff envisions is one where the host talks directly at the camera, a model employed by her new Vogue Channel series "73 Questions." Each episode is filmed in a single shot of a celebrity subject who leads the viewer on a tour of her house while being peppered with questions. (Vogue EIC Anna Wintour also recently submitted to doing an episode of the show.)

Financial Times Sees Opportunities in Smartwatches
The Financial Times has launched its fastFT service on the Samsung Gear S in its first venture into the wearables space. The publisher has teamed up with technology provider Spritz to create the app, which will deliver a written content stream to users at a speed of their choosing. It’s the first deal with a publisher for Spritz, and the app will be available on Samsung's freshly unveiled Samsung Gear S smartwatch. In an interview after the launch, FT chief technology officer John O’Donovan said publishers would be "fools" to disregard wearables. He said that early testing on the platform has “validated” that responsive web design is not all it’s cracked up to be, and that publishers must contextualize content to the screen or device on which their content is being consumed. “Smart watches are going to change the way you read content," he said. "Talk around responsive design has taken over, but that doesn’t mean very much. The reason why we particularly liked the idea around the watch is it shows a total change in how you read content because the screen is so small. It completely validates that there is a model that isn’t just about making web pages smaller--that’s always been my bugbear – ‘make the website smaller and it will work on each device.’” O’Donovan pointed out that only a few years ago, many laughed at the idea that half of publishers’ traffic would be generated by mobile--and yet that has now become a “boring statistic” due to its commonality.
The Drum (FT app for Samsung Gear S)
The Drum (interview with FT's CTO)

Marriott Launches Global Creative and Content Marketing Studio
Marriott International is launching a global creative and content marketing studio to handle internal work for its portfolio of 18 travel-related brands. "We view this as the opportunity to be the world's largest producer of travel-related content," said David Beebe, Marriott's VP of creative, content marketing and global marketing. The former Disney-ABC Television executive and producer will lead the new initiative. The in-house division will have three parts: content development, which will be the personal creative agency; production, the division responsible for video content ranging from Web clips to TV shows; and distribution, a real-time marketing group that will monitor social media to ensure immediate interaction with trending topics. Marriott will continue to work with external agencies and other production companies as needed.


Retail News

Supervalu Reports Second Security Breach
For the second time in six weeks, Supervalu has experienced a security breach in its data systems. The Minneapolis-based wholesaler said Monday it has discovered that, since an earlier incident was reported in mid-August, an intruder installed malware into the portion of its computer network that processes payment-card transactions for some of its retail customers, including Shop ‘n Save, Shoppers Food & Pharmacy and corporate-owned and franchised Cub Foods stores. The company said it believes the latest intrusion did not succeed in capturing data from any payment cards used at stores, except possibly at four franchised Cub Foods stores in Hastings, Roseville, Shakopee and White Bear Lake, Minn., where implementation of enhanced protective technology had not yet been completed. The malware may have been successful in capturing account numbers from those four stores, in addition to expiration dates, other numerical information and/or cardholders’ names, from transactions between Aug. 27 and Sept. 21, Supervalu said, adding that it has made no determination that any cardholder data was stolen. The four Cub stores are offering customers who used payment cards during that period 12 months of complimentary consumer identification protection services through AllClear ID. According to Supervalu, once it recognized the intrusion, it took immediate steps to secure the affected part of its network, and it believes it has eradicated the malware. Supervalu also believes its enhanced protective technology significantly limited the malware’s ability to capture data from payment cards where the malware was installed. It said it's notified federal law enforcement authorities of the latest incident and is cooperating in their investigation. The company also said it is continuing to take actions to implement further security enhancements and to improve its information security safeguards. Supervalu said it believes this second incident was a separate intrusion from the one disclosed on Aug. 14, which involved stores operated by Albertsons LLC and New Albertsons, Inc.

Raley's New Supplier Guidelines Ban 83 Ingredients
"Although Raley’s introduction of new supplier guidelines, in which dozens of additives and preservatives will be banned from its stores, could be viewed as expected considering Americans’ continuing tilt toward healthier consumption, it is nevertheless a stunning move in which one of the country’s largest conventional grocers appears to be repositioning itself as a natural-focused retailer," writes BevNet. Headquartered in West Sacramento, Calif., Raley’s owns and operates 132 stores in California and Nevada, including those under the Bel Air Market, Nob Hill Food and Food Source banners. With an estimated $3.2B in sales for the fiscal year ending on June 28, the grocery chain is ranked number 42 in Supermarket News’s list of the “Top 75 North American Food Retailers and Wholesalers for 2014.” Placing it squarely at the forefront of natural food trends and greater demand for traceable goods, Raley’s has curated a list of 83 ingredients that will no longer be acceptable for inclusion in products sold in its stores. According to sources close to the matter, Raley’s has informed current suppliers of the new guidelines, and while existing products carried by the chain are currently exempt, the company has “put vendors on notice to change.” The list is similar to that of Whole Foods’ “Unacceptable Ingredients for Food,” which includes 78 ingredients commonly used by food and beverage producers, including artificial colors, high fructose corn syrup and sucralose, as well as a number of preservatives, such as sodium benzoate. Also listed are potassium bromate (often used as a leavening agent), azodicarbonamide and brominated vegetable oil (BVO), each of which has been the subject of recent controversy regarding potentially harmful food additives. There are, however, a few significant differences between the two lists. Unlike Whole Foods, Raley’s will no longer stock food products that are made with genetically modified organisms (GMO). While Whole Foods last year issued an edict declaring “full GMO transparency” in its stores by 2018, the natural grocer will continue carry products made with GMOs. And though Whole Foods is well-known for its policy of selling meat, poultry and fish that are raised without the use of antibiotics, Raley’s explicitly names antibiotics as being banned for use in any products that it sells. Raley’s has also prohibited the use of bST, rbST bGH, rbGH, each a widely used bovine growth hormone that is injected into dairy cows to boost milk production, from supplier products. Foie gras, forbidden in Whole Foods, is not on Raley’s list, however most of its stores are in California, which already has a state-wide ban on the sale of the fatty duck and goose liver.

Instagram Founder Joins Wal-Mart Board
Wal-Mart Stores said Monday that Instagram founder and CEO Kevin Systrom, 30, has accepted an appointment to its board of directors. Systrom became the 15th member of the board effective Sept. 26 and will serve as a member of the company’s technology and e-commerce committee and its compensation, nominating and governance committee.

Peapod Launches in Lehigh Valley
Peapod and Ahold USA sister company Giant-Carlisle have expanded the Peapod home and business delivery service to communities in Lehigh and Northampton, Pa., counties, including Allentown, Bethlehem, Catasauqua, Easton, Emmaus, Hellertown, Macungie, Nazareth, Trexlertown and Zionsville. “This expansion effort is in direct response to customer demand,” said a Peapod exec. Peapod is now available to 15M+ Northeast households.

Aldi's U.K. Profit Soars 65.2%
Aldi posted a 65.2% rise in profit and a 36% rise in sales in the U.K. The German discount grocer has pulled market share from the U.K.'s four grocery giants: Asda (owned by Wal-Mart), ?Morrisons, Sainsbury's ?and Tesco. Aldi also announced that it's on track to open 54 stores in the U.K. this year, and another 60 to 65 next year. Research last month from Kantar showed that half of the British population now shops at Aldi or its fellow deep-discounting German import, Lidl. Aldi, which late in 2013 said that it plans to open 650 new stores in the U.S., was ranked the #1 discount food retailer by consumers in this year's Market Force survey, for the fourth year in a row.
Food Dive U.K. financials
Food Dive U.S. expansion plan, 12.13

Morrisons Ex-Treasurer Charged with Insider Trading
Financial regulators in the U.K. have charged the former treasurer and head of tax at grocery chain Morrisons with insider trading of shares in Ocado, an online grocery delivery company. Paul Gerard Coyle faces two charges of insider charges of "insider dealing," which is the British term for illegally benefiting from insider knowledge about a stock. At issue are alleged purchases of shares in Ocado prior to the announcement in May 2013 that it would partner with Morrisons. Coyle was arrested in connection with the case in December and left Morrisons in January.

NGA Applauds Revised Ad Allowance Guidelines
The National Grocers Association commended the FTC Monday for revising legal guidelines on advertising allowances that the trade group had endorsed in testimony earlier this year. NGA said the FTC had agreed with some of the points it made, including retaining a number of provisions of the Robinson-Patman Act that prohibit discrimination in promotions and allowances, as well as the act’s primary purpose of prohibiting anti-competitive price discrimination. The FTC also revised several sections of the law to reflect changes since 1990 due to technological advancements and online retailing. "This decision ensures that all sizes of retail competitors, including independent, community-focused grocers, will be treated equitably,” said NGA president and CEO Peter J. Larkin. The guidelines, which regulate how suppliers can provide advertising allowances or furnish services to a retailer under proportionally equal terms, were originally implemented in 1969 following a U.S. Supreme Court decision in a case involving Fred Meyer.

eBay to Spin Off PayPal Business
eBay said it plans to spin off its PayPal business into a separate publicly traded company next year, taking a page from activist investor Carl Icahn, who had pushed for the split. The decision comes as eBay faces fresh competition in the payments sector from Apple Inc.'s new Apple Pay mobile payments service. Devin Wenig, the current president of eBay Marketplaces, will be CEO of the new eBay, while American Express Co. executive Dan Schulman will lead the new PayPal. Schulman will immediately take over as president of PayPal. Shares surged 11% premarket as eBay said it expects to complete a tax-free spinoff of its payments business, which was considered by many to be its crown jewel, during 2H 2015. PayPal has more than 152M active registered accounts, and revenue for the past four quarters grew 19% to about $7.2B. Total payments volume increased by 26% to $203B over the same period, and PayPal facilitates one in every six dollars spent online, eBay said.

Delhaize to Join European Buying Group Coopernic
Delhaize Group said Monday that it would join Coopernic, the European buying alliance headed by French retailer E. Leclerc, in January. Italian retailer Coop Italia is also expected to join the group in October, Delhaize said. Brussels-based Delhaize said the three organizations in Coopernic will share expertise in private brand innovation and development; commercial terms with international suppliers; and synergies in nonfood procurement.


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