Under Newly Elected Chairman, Ebony Board Ousts CEO
Folio: "The board of directors at Ebony has removed CEO Willard Jackson, citing an ongoing independent investigation into “a number of transactions that Jackson led.” Jackson, a co-founder and vice chairman of Clear View Group (CVG), the private equity firm that acquired Ebony from Johnson Publishing in 2016, had been serving as Ebony‘s chairman and CEO since last year. The board’s decision to remove him, however, was made under newly elected Ebony chairman Jacob Walthour, the co-founder and CEO of Blueprint Capital Advisors, which became senior lender to Ebony Media Holdings in late April after taking over for Parkview Capital Credit, the investment management firm that had financed CVG’s 2016 acquisition of the magazine through a series of loans. “We took over Parkview Capital Credit on April 29, and then I immediately went on the board in May,” Walthour told Folio: on Monday. “Our first board meeting was when we started asking a lot of questions.” Walthour didn’t share many specifics on the decisions that precipitated Jackson’s removal as CEO, but said there were “a number of transactions, both corporate and personal” that raised concerns. Clear View Group did not respond to a request for comment, but Walthour confirmed that CVG’s chairman, Michael Gibson, remains on the Ebony board.“At this stage in the inquiry, we felt like there was enough ‘there’ there to affect a leadership change,” Walthour said. “A lack of transparency was part of it. More troubling was a failure to follow the process and protocol of the company. There are certain transactions that require board approval and there were a number of unauthorized transactions that we found that had never been vetted or approved by the board. ”At least two of the transactions in question concern Robert Shumake, a Detroit businessman who was named in a June press release as chairman and CEO of the Ebony Foundation, which identifies itself as the “the national nonprofit arm of Ebony Capital Partners, LLC,” but isn’t referenced or mentioned anywhere on Ebony‘s website and was previously known as the International Human Rights Commission Foundation prior to registering a name change last August, according to Georgia state records. Next, the board will be conducting a review of “all aspects of the business—which businesses we will continue to be in, which ones we will exit, and which ones we’ll pursue going forward,” Walthour said. “We’ll look at how the organization is managed, how it is operating and how it is doing from a financial perspective.” Evidence of financial turmoil at Ebony has abounded in recent years, including multiple rounds of layoffs, a 2018 settlement with the National Writers Union after several-dozen freelancers accused the magazine of failing to compensate them for their work (delays which CVG blamed on “legacy business issues” carried over from Ebony‘s prior ownership), and a class action lawsuit brought by former employees in the Southern District of New York in September, accusing CVG of “engaging in a consistent pattern and practice of laying off their staff and failing to pay them their final wages.” In late April, Ebony Media Operations was approved for a PPP loan worth between $150,000 and $350,000, according to data released this week by the U.S. Small Business Administration, but in June, former social media director Joshua David told The Root that Ebony‘s entire remaining online editorial team was let go after threatening a work stoppage in response to a notice that their paychecks would be delayed. “There is no question that Ebony is in need of a makeover in order to be around for the next 75 years,” said Walthour. “I think you have a board that is now a majority new members, who understand the value and the legacy of Ebony, who have the ability to bring new capital sources to the table, and we’re looking forward to putting the company in a position to get some of those capital sources involved.” Among the board’s immediate priorities will be resolving the class action lawsuit in New York... A likely casualty will be Ebony‘s print edition, which has now been on hiatus for more than a year. The magazine’s 2020 media kit includes an introductory note explaining Ebony‘s decision “to lean into a ‘digital-first’ strategy” this year amid disruption in the publishing industry and an increasing cost of operations. “It is highly unlikely that Ebony returns to the print business the way it had historically. More than likely, we will do special issues around a specific topic or individual or group of individuals,” Walthour said, citing the magazine’s upcoming 75th anniversary print edition. “But in all likelihood, we will not be returning to issuing 12 publications a year.""
NY Mag Hires Editorial Director for Audio, Promotes 3 Others
Folio: "With ambitions to “greatly” expand its podcast output, New York magazine has brought on writer and radio host Hanna Rosin as editorial director for audio, editor-in-chief David Haskell said Wednesday. In the new role, Rosin will be tasked with overseeing the magazine’s existing podcast portfolio, including Kara Swisher and Scott Galloway‘s “Pivot” and a forthcoming launch tied to The Cut, as well as exploring new series. Previously a writer for The Atlantic and Slate, among others, Rosin was most recently with NPR, where she’s co-hosted the podcast/radio program “Invisibilia” since 2016. Additionally, New York announced three internal promotions. The Cut senior editor Adrienne Green has been promoted to features editor at New York; Gazelle Emani, currently deputy editor of the site’s entertainment news offshoot, Vulture, has been promoted to culture editor at New York; and staff writer Zak Cheney-Rice has been promoted to features writer.
Elle Creative Director Latest to Face Accusations from Emplolyees
NY Times: "In mid-June, Stephen Gan, the founder and editor in chief of V magazine and the creative director of Elle, was eviscerated on Diet Prada, the Instagram feed popular in the fashion industry. Many of his former staffers told the editors of the feed that he was racist, homophobic and sexist... In mid-June, Stephen Gan, the founder and editor in chief of V magazine and the creative director of Elle, was eviscerated on Diet Prada, the Instagram feed popular in the fashion industry. Many of his former staffers told the editors of the feed that he was racist, homophobic and sexist. He followed it up with a post on V’s Instagram account saying that he was committed to “acknowledging my shortcomings,” though he declined a request to be interviewed for this article, calling the claims “rumors"... The fashion industry, which has long considered elitism and exclusion to be core values, is going through a painful transition"...
Opinion: Publishing’s Long Road to Recovery Will Require More Detours
Folio:'s Casey Welton writes in part: "Publishers have been hit hard by this pandemic, and will no doubt be struggling to hang on for months, if not years, after it finally passes. What’s troubling about knowing this is that we have no reasonable idea when it will actually pass. We are just as uncertain now, as we were in the middle of March... here we are... [still] at the mercy of a virus we clearly cannot control. The third quarter is upon us, and many publishers that rescheduled their events, or paused their print schedule or other business initiatives were looking to this time, and the next quarter, as opportunities to bounce back and reestablish some footing. Instead, in addition to continued malignant uncertainty, we are dealing with the bitterly harsh reality that all of the really important stuff we put on hold may remain that way indefinitely. This isn’t meant to be some sort of grim wakeup call. I assume most of you are hyperaware of the current state of things, and fully understand what’s at stake. Instead, what I want to express here is an urgent plea to our industry to keep pushing forward with the sorts of creative initiatives we’ve been seeing since March, which are reinventing our industry. Publishers have shown not only a great deal of resiliency, but also an eagerness to evolve quickly, experiment and look ahead and consider what a new business model could look like. This approach will be prerequisite to weathering whatever storms lie ahead—this includes long after the pandemic has passed"...
OTHER NEWS OF NOTE:
Another 1.3M File for Unemployment
USA Today: "1.3M workers filed first time claims for unemployment insurance last week, the Labor Department said Thursday. That latest round of applications means roughly 50M Americans have made initial jobless benefits claims in just 16 weeks. Initial jobless claims are the nation's most reliable gauge of layoffs and there has been progress. About 1.43M sought such aid the previous week, and the latest number marks the 14th week in a row that initial claims have declined. But it's also the 16th week in a row that first-time unemployment filings exceeded 1M. The continuing high number of jobless claims punctures the positive news last week that the U.S. economy added a record 4.8M jobs in June as states allowed more businesses to reopen... The jobless rate fell to 11.1% from 13.3% in May... [but the] economy has still suffered a net loss of 14.7M jobs during the pandemic, and the data for the most recent monthly jobs report was collected in mid-June, before the spike in virus cases occurring in dozens of states. "Initial state claims have barely budged over the past month, and are only 16% lower than on June 6,'' Andrew Stettner, senior fellow at The Century Foundation, said in a statement. "Equally concerning, initial state claims increased in 23 states last week, including those with major virus spikes, such as Texas and Louisiana""...
Lidl's Arrival Pressures Rivals to Slash Prices
PG: "Lidl’s recent store openings on New York’s Long Island pressured competing grocers in the market to reduce their prices by as much as 15%, a new study from the University of North Carolina Kenan-Flagler Business School has found. Katrijn Gielens, professor of marketing at Kenan-Flagler, led the independent study, which was commissioned by Lidl US. Referencing data collected just before the COVID-19 pandemic resulted in supply shortages, the study noted that Lidl’s prices were about 45% lower than Trader Joe’s and more than 30% lower than other national retailers on Long Island. These findings revealed that Lidl’s price-cutting effect is counteracting the steepest rise in food prices experienced by consumers in decades. Gielens analyzed the prices of 47 private label grocery products across dairy, meats, produce and canned and frozen foods, and looked at prices at Aldi, BJ's Wholesale Club, Costco, King Kullen, Stop & Shop, Target, Trader Joe's and Walmart before and after Lidl entered the Long Island market. Prices were collected on visits to 27 stores between April 2019 and March 2020. The study found that Lidl’s impact on competitive price-cutting effect is greater than Walmart’s entry in a new market, as reported by previous academic studies. Lidl’s food prices were about 45% lower than Trader Joe’s, 39.6% lower than King Kullen and 33.8% lower than Stop & Shop. At Target and BJ’s, price differences were 18.5% and 10%, respectively. For Costco, Aldi and Walmart, no price differences were found... The study found that Aldi cut its prices by 15% and Walmart by 9% after Lidl's entry; Stop & Shop and King Kullen by 5.3% to 3.8%, respectively; Costco by 8.3%; and Target and Trader Joe’s by 4%. Despite a general trend of a more than 2% increase in grocery prices between April 2019 and March 2020, competing retailers on Long Island set their prices for individual products, including staples, considerably lower after Lidl entered the market... By contrast, retailers on Long Island increased their prices significantly last fall, when stores were being remodeled and Lidl had not yet opened stores. With less competition at that time, King Kullen and Stop & Shop raised their prices by about 12% and 9%, respectively; Target and BJ’s by up to 8%; and Costco by 6%. After Lidl opened stores, those price increases were erased"...
Albertsons Named SN's Supermarket of the Year
SN: "Supermarket News has selected Albertsons Cos., the nation’s second-largest supermarket operator, as its Retailer of the Year for 2020. The past year has seen Albertsons successfully go public, spur growth and innovation in strategic areas such as e-commerce and private brands, and refresh its store base, among other initiatives. The result: improved customer loyalty, a resurgent financial performance and market share gains. More recently, the Boise, Idaho-based company has effectively adapted to the vast changes brought by the coronavirus pandemic, implementing comprehensive protections for customers and employees as well as advocating for grocery workers to be designated as emergency first responders during the crisis"...
Kroger's $180M Account Goes to Dentsu Aegis
MediaPost: "Kroger has selected Dentsu Aegis Network as its first integrated media agency of record after a formal review. Kroger spent close to $180M on measured media last year, per Kantar Media. DAN will create a team to serve Kroger called fresh@dentsu, led out of full-service media and creative agency 360i as well as with specialists from Amplifi, M8, Merkle, MKTG and Posterscope. The fresh@dentsu team will be responsible for media planning and buying for Kroger and its family of brands across all media channels, including TV, radio, print, OOH, search, social, display, online video, and streaming audio. The agency will also partner with Kroger to evaluate sponsorships. Other Kroger brands include CityMarket, Food4Less and Fry’s Food Stores"...
Online Surge Accelerates Demand for Warehouse Space
CNBC: "With more people clicking “buy” online, demand for industrial real estate could reach an additional 1 billion square feet by 2025, according to commercial real estate services firm JLL. The boom for fulfillment centers comes as the traditional retail real estate industry is suffering with store closures piling up and rents plummeting, as companies look to negotiate new leases"... In a related story, NY Times documents how the warehouse boom has turned an undeveloped area outside L.A., dubbed the "Inland Empire," into a mass of huge commercial spaces, and how the workers are now at elevated risk as COVID spikes in the state.
Weis, Smart & Final, Others Launch Digital Ad Solution
PG: "Mercatus has launched a new capability to combine the company's integrated e-commerce platform with a scalable native advertising program powered by CitrusAd. Weis Markets, Smart & Final and Piggly Wiggly Midwest will be the first grocers to adopt the Mercatus Digital Advertising solution, designed to help them drive additional revenue from their ecommerce storefronts and garner national CPG digital ad dollars by providing a turnkey solution for online advertising and reporting. Through CitrusAd, Mercatus gains access to retail media technology to enable targeted, contextual native advertising during online shopping... Targeted product search, category results and native display ads encourage shoppers to add offered products directly to their digital carts instead of being redirected off site"...
OTHER NEWS OF NOTE: