Conde's CEO Talks Video, Acquisitions, Layoffs
WWD: "Condé Nast’s new CEO is starting to put his stamp on the company. In Roger Lynch’s first company-wide meeting at the end of last month, the new CEO tried to bring a more communicative style to his role, which he’s held for about four months... although he quipped during the meeting that “it feels longer.” Unsurprising since Lynch has been overseeing the broad reorganization of Condé as it fuses U.S. and international operations, organizing a just-revealed executive reshuffling, digging into the state of the publisher’s current business and holding a number of listening sessions with employees, including those in nine offices abroad so far, according to a video of the meeting seen by WWD. From these employee sessions, Lynch said he heard a number of questions and concerns on the reorganization and what it means for the company and that he wanted to address them directly. He also gave some details about the current state of the company’s business and some insight as to where he sees it going. Lynch seems most bullish on video, an area other company executives have been trumpeting as essentially Condé’s saving grace for a year, at least. He said the segment could eventually be a $1B segment for Condé, which would effectively mean doubling the company’s current estimated revenue. “When I joined, I knew we had good prospect to grow video and I only have more conviction in that today,” Lynch said. “We’re just scratching the surface.”But that’s in the future. The immediate goal is still getting the company steadily profitable, something that is not yet a certainty, as Lynch told employees the company is not likely to meet internal projections for this year. A graph without dollar amounts that only delineated “negative growth” in gray, showed Condé’s combined international and U.S. business spent all of 2017 operating at a loss, along with the first half of 2018, although the second half of the year ended up profitable. For this year, the company is estimating another dip into a loss for the first half, but again expects the second half to rise back into profitability. As previously reported, Condé’s 2017 loss in the U.S. amounted to about $120M, and 2018’s brief return to profitability in the second half was a better-than-expected result. Although the international business has been solidly profitable since the second half of 2018, the U.S. business has mostly operated at a loss at least since the start of 2017. The company’s estimates show it will remain at a loss for the first half of this year, but it expects to end it profitable.Nevertheless, Lynch explained that the company does not expect to meet its current projections for this year. In the U.S., year-over-year revenue growth of 4% was planned, but the new estimate is only 0.3% growth for 2019. The CEO didn’t chalk the difference up to print declines — given the segment is actually ahead of plan — but “headwinds in other areas, like display [advertising], where prices have come down pretty substantially.” Europe, Middle East and Africa, too, is expected to miss revenue plans of 4% growth, now estimated to grow by 3%. But business in Asia-Pacific regions is expected to substantially beat a plan of 4% growth, estimated now to come in at 11% ahead. Although Latin America, a relatively small market for Condé, had ambitious 15% growth planned and is now only expected to come in at 3% growth, Lynch more than once in his presentation told staffers the area was one they should expect “more investment” in. Given all regional disparity in Condé’s business, Lynch pointed out that “when you combine the [U.S. and International businesses] what you see is that together, this company is stronger. When one region is a little weak, the other is better.”But the majority of revenue still comes from the U.S., which Condé estimated makes up 56 percent. EMEA makes up 28%; Asia-Pacific 15%, and Latin America only 1%. Lynch also broke down Condé’s biggest brands by revenue. Vogue came in at the top, bringing in 28% of the company’s revenue; GQ was next at 13%; The New Yorker and Vanity Fair each bring in 10%; Architectural Digest and Wired each bring in 6%; Glamour, Bon Appetit/Epicurious and Allure each 5%, and Condé Nast Traveler 4%. The remaining 8% comes from Condé’s digital-only brands, like Pitchfork and Self, a brand Lynch touted as becoming profitable again since it’s life in print ended. Speaking of print, revenue from the segment has declined 15% since 2017, when it still counted for 50% of Condé’s business. It’s estimated to be 36% of business this year, but Lynch insisted that growth in other areas has made up for the decline. Web advertising is estimated for 2019 to be 24% of the business; video, 11%; consumer, 18%, and “other” 11%. Other includes things like Allure’s Beauty Box and live events. The takeaway from this breakdown for Lynch is that “the cornerstone is our editorial excellence and audience…without that core foundation we don’t have a business.” But he did note a “need to monetize the consumer engagement we have... We really have tremendous consumer engagement globally and it’s growing. Some [areas] don’t monetize right now as well as print. This includes video and audio, which is a big opportunity for us, and direct-to-consumer, and a food expansion. We think there’s a global opportunity for us to expand what we’re doing in food and b2b.” Condé has already launched Vogue Business and AD Pro, only the latter of which is on a subscription model. Something Lynch did not mention was Condé’s previously announced plan to put all of the publisher’s web content behind a paywall by the end of the year. This was a plan revealed before Lynch joined the company, but one touted at the time as a “game changer.” More than the state of Condé’s business, staffers were most interested in the prospect of layoffs. During the meeting, Lynch addressed five questions that were the most “upvoted” and the number-one question was about staff cuts, something that Lynch was clearly not surprised by but oddly drew a laugh from the staffers in New York that he was speaking to in person. Layoffs at Condé have come basically on a rolling basis for the last several years as the company looked to drastically cut costs in an effort to stem financial losses. Lynch admitted that with the reorganization “there may be some roles that are duplicative” but promised that if the time does come for layoffs, “we’ll be open and transparent in how we deal with that.” The budget process for 2020 is just getting underway.Staffers also asked things like what other companies Lynch sees as inspiration (Netflix and The New York Times), the prospect of improved maternity leave (the current policy is under review), whether there are any acquisitions planned (no, but the company board has said there is money for acquisitions once the company is reorganized and stable).Watching Lynch speak to staff, it seems clear that he’s trying to cultivate a new, more open era at Condé"...
Essence Redesigns; Moves to Bimonthly Frequency
NY Daily News: "Essence magazine, the leading black women’s lifestyle magazine, will move from a monthly publishing schedule to six issues a year, starting in 2020.The independently owned publication, founded in 1970, announced that it will be move to an “enhanced double issue,” featuring an additional 80 pages per issue. The Brooklyn-based company, owned by former Shea Moisture beauty products founder Richelieu Dennis, said that it will also produce four special, collectible “bookazines,” that will be made available throughout next year. “As we approach our 50th anniversary as a brand, we are grateful that Essence continues to thrive in a class of its own — by tenure, by focus and by impact,” said Michelle Ebanks, CEO of Essence Communications. “Essence stands the test of time because we have always responded to the diverse and evolving needs of the community of Black women we serve with the urgency, quality and understanding they deserve, and that remains our focus in everything we do — to test, learn and grow with the community that grows with us.” The magazine, which was previously owned by Time Inc., has undergone a redesign with its September issue, focusing on global fashion with tennis icon Serena Williams as its cover subject. MoAna Luu, the Caribbean-born interior designer, philanthropist and former brand officer for Africa’s Trace Media Group, is spearheading the editorial initiatives as Essence’s recently appointed chief content and creative officer."
Departures Marks 30th Anniversary; Reports Advertising Uptick
MediaPost: "Travel and lifestyle magazine Departures is celebrating its milestone 30th anniversary with an issue focused on visionary voices and sustainability.The September issue of Departures, published by Meredith Corporation for American Express Platinum Card Members, features a range of profiles of forward-looking notables, including Lin-Manuel Miranda, Anna Deavere Smith, Swizz Beatz and José Andrés.Stories focused on making cities more efficient, remedies for over-tourism and making clothing more responsibly round out the theme of the issue. “It was really important for us to celebrate Departures’ 30 years by looking forward at what the next 30 years could bring. We are in a time when how we travel, shop, eat and engage with the world has real impact on the health of the planet and all of us who live on it,” said EIC Jeffries Blackerby. “This issue explores the impact and the steps being taken by a wide range of companies and creators to address them,” he added.The issue saw a 21% rise in revenue from advertising versus the September 2018 issue as a result of new and increased business across the travel and fashion categories.New business for the 30th anniversary issue includes ads from Hublot, Tom Ford, Toyota Supra and Vacheron Constantin.Departures is published seven times a year, alongside the biannual Departures Home + Design. The title also publishes 18 international editions. The title is sent exclusively and free-of-cost to American Express Platinum Card Members."
The Economist's Subs Steady Despite Price Hike
MediaPost: "Despite raising the price of subscriptions for The Economist earlier this year, worldwide print and digital circulation has held steady at about 1.6 million.In March, The Economist raised the prices of its subscriptions by 20%. Newsstand pricing was held flat. The print versus digital split is 52% vs. 48%. The price hike is part of The Economist’s on-going strategy to maintain profitable circulation, according to a spokesperson.Yesterday, The Economist pointed to the Audit Bureau of Circulations January to June 2019 certificates to show circulation has remained flat from the previous period. “As publications continue to face headwinds in a challenging media environment, we are proud of the fact that we continue to attract and retain loyal readers at a premium price,” stated Marina Haydn, EVP-managing director of circulation at The Economist. Haydn added: "To uphold this momentum, our focus is fully on reader and prospect engagement, in particular across our digital product spectrum." For the North America region, combined print and digital circulation for The Economist is 907,018, up 1.1% from the previous period, according to ABC’s data. NA circulation accounts for 55% of global circulation."
People, Arm & Hammer Run 'Coach Appreciation' Campaign
MediaPost: "Meredith Corp.’s People magazine and baking-soda company Arm & Hammer are partnering on a new campaign and giveaway to show appreciation for coaches.The “Thank You, Coach $100,000 Giveaway” encourages people to nominate coaches “who go above and beyond to inspire and empower their team members,” according to the companies.The seven-week campaign will consist of several editorial features in People, beginning with the August 26 issue, on newsstands today. Stories will spotlight coaches “who are helping to empower others.” It will also include an advertorial featuring the story of Coach Sam Stukes from El Paso, Texas and her youth program “Bonafide Basketball.” The campaign will also produce short-form and long-form videos, as well as ads that will roll out on the Arm & Hammer website, social channels and in print. A&H will award $5,000 to 20 coaches across the country who help their teams and communities.Coaches can be nominated on Instagram, online or by mail before Sept. 30. Winners will be selected in a drawing in mid-October. The partnership was led by The VIA Agency, the creative advertising and digital agency for Arm & Hammer, and Wavemaker, the media, content and technology agency for the brand.“This program created an opportunity for us to bring together the power of People’s iconic ‘Heroes Among Us’ editorial feature and the power of Arm & Hammer as an enabler of heroes,” stated Jane Barasch, executive director of client leadership at Wavemaker US. “Heroes Among Us” is a long-running editorial franchise from People that spotlights regular people who have done heroic or inspiring things in their communities."
Deadspin to Focus on Sports After EIC's Angry Departure
Daily Beast: "Deadspin’s editor in chief has left the company, saying the new leadership of parent company G/O Media have made it “impossible” for her to continue working there.“I have been repeatedly undermined, lied to, and gaslit in my job,” Megan Greenwell said in a brief phone call with The Daily Beast on Friday.G/O Media was formed earlier this year when Gizmodo Media Group, the former Gawker Media company that included sites including Deadspin, Gizmodo, and Jezebel, among others, was purchased from Univision by private equity firm Great Hill. As The Daily Beast previously reported, G/O’s new leadership have occasionally clashed with some of the company’s famously independent and outspoken editorial staff. Greenwell said Friday that she feels “heartbroken” about leaving and that, while she does not want to be seen as a victim, recent decisions by company brass left her with few options.Among the many grievances, Greenwell said, G/O leadership refused to guarantee editorial independence for Deadspin and asked for the site to “stick to sports”—a long-running source of frustration for a staff that also covers media, politics, and culture beyond sports.“That's not something I feel I can ethically do,” the departing editor said.In a statement to The Daily Beast, G/O Media editorial director Paul Maidment said, “We are laser focused on serving Deadspin readers sports and everything related to sports. Our former editor had a different vision and we wish her well in her future endeavors""...
NLRB to Probe Barstool Sports Founder's Anti-Union Tweets
THR: "Dave Portnoy, founder of Barstool Sports, will have to answer to a charge with the National Labor Relations Board that his recent tweets amounted to an illegal effort to discourage his employees from joining a union."Heard @ringer employees want to unionize," wrote Portnoy on Aug. 12 in a reference to Bill Simmons' media group. "Little refresher how I feel about unions."Portnoy linked to a post he authored four years ago upon a vote by Gawker staffers to unionize. The post stated, "BAHAHA! I hope and I pray that Barstool employees try to unionize. I can’t tell you how much I want them to unionize. Just so I can smash their little union to smithereens."Rafi Letzter, a staff writer at Live Science, then tweeted out, "If you work for Barstool and want to have a private chat about the unionization process, how little power your boss has to stop you, and how you can leverage that power to make your life better: my DMs are open."Portnoy responded by tweeting, "If you work for @barstoolsports and DM this man I will fire you on the spot."The exchange gathered notice. Alexandria Ocasio-Cortez expressed how this was "likely breaking the law" while Donald Trump Jr. opined, "Picking a fight with @stoolpresidente and @barstoolsports is probably the biggest mistake @AOC has ever made on Twitter." The situation has now escalated to action before a federal agency.A group calling itself the Committee to Preserve the Religious Right to Organize has filed charging papers at the NLRB against Barstool Sports, which is majority owned by The Chernin Group.According to a copy of the charge, obtained by The Hollywood Reporter, "Within the last six months, Barstool Sports, affiliated with the Chernin Group, through its crazed president, Dave Portnoy, has threatened to discipline employees on account o[f] Union and/or protected activity. The Charging Party seeks as relief that Mr. Portnoy be required to tweet and otherwise publicize his severe and sincere apology and to post the appropriate Notice on the public website. He should be required to read the Notice to all employees and make a public announcement about the Notice on his media locations of any nature."The NLRB has acknowledged filing and sent a letter to Barstool Sports for response"...
OTHER NEWS OF NOTE:
Checkout-Free Tech Inches Closer to Grocery Implementation
PG: "Amazon plans to open 3,000 cashierless stores, with many other players entering the category in a big way. These tech companies have their sights not only on 2,000- or 3,000-square-foot convenience stores, but also on grocery stores 10 times that size or larger. “The problem has been known for a while that the checkout experience has been steadily becoming more and more frustrating, starting from the time when barcodes were introduced,” says Krishna Motukuri, CEO of San Francisco-based checkout-free technology company Zippin. “As labor costs go up and retailers face intense pressure on their margins, it’s only gotten worse.”Checkout-free technology could be the answer. In Phononic’s “2019 Store of the Future Report,” nearly nine out of 10 Americans (86%) said that mobile apps will allow people to scan groceries as they shop and then pay through an app in the next five years. “Right now, what we’re seeing in grocery is kind of this transition where experience really matters for the end user,” says Ahmed Beshry, co-founder of Caper, a provider of smart shopping carts. “Unlike 10 years ago, if I’m in a grocery store and the experience is bad, I don’t have to go through the whole painful process of waiting in line.”As checkout-free continues to inch closer to traditional grocery, these technologies aim to maximize benefits for both the retailer and customer. “Number one, there is a new level of acceptance of technology in retail spaces, because grocers are looking to differentiate and create a better shopper experience,” says Andy Radlow, chief marketing officer for Berkeley Calif.-based checkout-free technology company Grabango. “The second thing is that this introduction of technology is heightening competition, and that competition is very bottom-line driven.“You’re talking about businesses on a legacy basis that are 1 to 3 percent net-profit businesses, but very high-revenue businesses,” Radlow continues"...
Kroger Express, Pickup Expanding to Walgreens Stores in Knoxville
PG: "The Kroger Co. and Walgreens will expand their partnership to stores in Knoxville, Tenn. Beginning this fall, 35 Walgreens stores in the area will feature the store-within-a-store Kroger Express concept and Kroger Pickup, while 17 Kroger stores will launch Walgreens' private-brand health and beauty products.This pilot is a continuation of a test that began in northern Kentucky in October and then expanded in December to include the Kroger Express concept as well as some stores in the Chicagoland area... Most of the Walgreens locations will carry the full Kroger Express assortment, which has up to 2,700 products, while other stores will offer an average of 2,300 products. These include Kroger's Our Brands products, national brands, fresh meat and produce, and Home Chef meal solutions. The Kroger pickup component allows shoppers to place ecommerce orders from the Kroger website or through the Kroger app for pickup at a participating Walgreens. The Kroger stores will carry Walgreens' own-brand products across several categories, including beauty, personal care, over-the-counter medications and wellness"...
Target Launches Flagship Private Label Brand
SN: "Target Corp. announced a new flagship brand, Good & Gather, which will be Target's largest food and beverage brand. By the end of 2020, the Minneapolis-based discount store retailer expects the brand to include more than 2,000 products.Eventually, the new brand will replace existing Target private label brands Archer Farms and Simply Balanced and some product offerings under the Market Pantry label. "Our guests are incredibly busy and want great-tasting food they can feel good about feeding their families," said Stephanie Lundquist, EVP/ president, food and beverage at Target. "We saw this as a huge opportunity for Target to help. So our team got to work on our most ambitious food undertaking yet, reimagining our owned food brands to serve up convenient, affordable options that don't cut corners on quality or taste. Good & Gather is our way of helping even the most time-strapped families discover the everyday joy of food." Good & Gather products were created based on guest feedback, according to the statement from Target. The products will span a wide range of food and beverage segments— dairy, produce, pasta and meats, snacks and sparkling water. Good & Gather will also include product extensions like kids’ and organic. All products are made without artificial flavors and sweeteners, synthetic colors and high-fructose corn syrup. In addition to grocery stables, the line will include "trend-forward products" such as avocado toast salad kits and beet hummus.Good & Gather will be available at Target beginning Sept. 15"...
Food Lion Continues Expansion of 'To Go'
PG: "Food Lion is continuing to expand its To-Go click-and-collect program, with 25 more of the banner’s stores set to introduce the service, which allows shoppers to order and pick up their groceries in as little as an hour, on Aug. 19.That day, a ribbon-cutting ceremony will be held at each location at 8:45 a.m., and to sweeten the deal, Food Lion is offering customers their first pickup for free. The locations where the service will be available are Edenton, Elizabeth City and Myrtle Beach, N.C.; and Ashland, Chesapeake (two stores), Gloucester, Hampton, Hayes, Louisa, Lovingston, Madison Heights, Mechanicsville (two stores), Norfolk, Orange, Prince George, Quinton, Rustburg, Ruther Glen, Suffolk, Virginia Beach, Wilderness, Williamsburg, and Yorktown, Va."...
Giant Buying Musser's Markets
PG: "Further growing its presence in its home state, Giant Food Stores has entered into an agreement with independent grocer Musser's Market to acquire its three Pennsylvania locations in Columbia, Lebanon and Quarryville. The sale is expected to wrap up by the end of October. At its completion, the stores will shutter for about a week to undergo remodeling, with additional details on the conversions to be released at a later date. Carlisle, Pa.-based Giant Food Stores operates 181 stores, 132 pharmacies, 102 fuel stations, more than 100 online pickup hubs, and a grocery delivery service in Pennsylvania, Maryland, Virginia and West Virginia, employing nearly 32,000 associates. The Giant Food Stores family of brands encompasses Giant, Martin’s Food Markets, Giant Heirloom Market, Giant Direct and Martin’s Direct. Parent company Ahold Delhaize USA."
Unilever U.S. Names Terry Thomas EVP of Customer Development
PG: "Unilever U.S. has named Terry Thomas its EVP of customer development. Thomas succeeds Gina Boswell, who is retiring after eight years at the company. Thomas joinedUnilever more than six years ago, heading the East Grocery accounts as well as the dollar/value, emerging and military channels. Last year, he took the helm of the Unilever U.S. Grocery business and the natural and direct store delivery channels, accounting for almost 50 percent of the U.S. business. Thomas has a proven track record of delivering results while driving greater operational discipline and efficiency. Additionally, as a member of the Unilever Diversity & Inclusion Board, he plays a major part in furthering the Unilever U.S. diversity agenda"...
OTHER NEWS OF NOTE: