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December 7, 2018

Publishing News


Country Living, Cracker Barrel Partner on Products, Apparel
MediaPost: "Country Living has teamed with Cracker Barrel Old Country Store to sell a collection of home goods and apparel exclusively at Cracker Barrel locations. Starting December 20, the line of products will be available at all of Cracker Barrel’s 657 stores across 45 states. It is one of the first big direct-to-retail licensing deals Country Living has produced. Cracker Barrel is the retailer that distributes the collection as well as the supplier. A few products are already available online at shop.crackerbarrel.com, such as a barn and windmill salt-and-pepper shaker set and a blue splatterware dog bowl. Some are also highlighted in Country Living’s December issue. 'Commerce continues to be a high priority for Hearst, as we continue to hone print and digital strategies to better serve consumers,' Steve Ross, Hearst Magazines’ Global Chief Licensing Officer and head of brand development, told Publishers Daily.“The direct connection to our audience helps us understand how and why and what they buy,' he says. Magazine brands are increasingly moving into the licensing business, like Meredith Corp.’s Real Simple and Bonnier’s Outdoor Life.Ross says this is because product licensing is an opportunity for 'more robust consumer interaction with the brand' than traditional advertising. It is another example of publishers working to diversify revenue 'at a time of great disruption in the magazine advertising business'... The collection, described as a line of products with a “modern farmhouse feel,” includes 83 items, such as rustic home decor, kitchenware, hand-made apparel and accessories and toys for pets. Items range in price from $0.99 to $149.99. A new theme and products from Country Living and Cracker Barrel is slated to release in 2019, and there is potential for future collections. Ross said Hearst looks for brand partners that can grow into "long-term" and "sustainable" programs. Country Living and Cracker Barrel first partnered on “Flip It Forward,” a pancake fundraiser to support military families through nonprofit organization Operation Homefront. Next year, Country Living is 'one of the priorities for Hearst brand development to continue to build and diversify revenue outside of the traditional publishing model,' Ross says.Cosmopolitan, Esquire, Good Housekeeping, Popular Mechanics, Car and Driver, Men’s Health and Women’s Health all have potential for future licensing opportunities as well, he added."
 

AMI Trades $3M in Ads for Protein Powder Firm
NY Post: "American Media Inc. has agreed to give $3M in advertising to MusclePharm, a protein-powder supplement maker, in exchange for more than 920,000 shares of common stock in the publicly traded company. AMI CEO David Pecker called the deal 'an extraordinary partnership.' The supplement maker was closely associated with Arnold Schwarzenegger, as a shareholder and ad pitchman, but he terminated his involvement with the company in 2016 after it came under fire from a number of lawsuits alleging deceptive ad claims in its ads. All but one of the suits have been settled.
 

The Street to Sell The Deal, BoardEx; CEO Resigns
TalkingBizNews: "TheStreet Inc. announced that it has entered into an agreement to sell its institutional business units, The Deal and BoardEx, for $87.3M to Euromoney Institutional Investor PLC. The deal is expected to close in early 2019. After it closes, chief executive officer David Callaway, who has been with the company since 2016, will leave the company. “The primary goal of our board and management team has always been to maximize shareholder value, and the sale of our B2B business to Euromoney is a unique opportunity to do just that,' said Callaway in a statement. 'Our board decided this was the best path to maximize value following our recent sale of RateWatch.' The company’s shares rose 46 cents, or 30%, to $1.98 in Thursday morning trading.The Deal and BoardEx, which reported revenue of $23.8M in 2017, has offices in New York, London, Wisconsin, Washington, San Francisco and Chennai, India. TheStreet acquired The Deal in 2012 and BoardEx in 2014"... NY Post: "The remaining company will be a shadow of its former self and could be sold or go private, industry observers say.The employee head count is expected to drop from just over 500 employees down to 75 once the deal officially closes — expected early in 2019.About 300 people in Chennai, India, 75 in London and a good number in New York who work on the two business-to-business units being sold will move to Euromoney.The remaining TheStreet people primarily work on [Jim] Cramer [host of CNBC's'MadMoney']-led paid subscription media including Action Alert Plus, Real Money and Retirement Daily as well as the ad-supported news service, which is challenged in a highly competitive market"...
 

Bloomberg News Sheds Senior Staff, Fueling Sale Speculation
NY Post: "Bloomberg News has quietly shed dozens of experienced reporters and editors this year — including some of its most senior staff — as its owner Michael Bloomberg considers selling its parent company ahead of a possible presidential run, The Post has learned.At least 43 reporters and editors, most of them in New York, are known to have left the sprawling news operation this year, according to interviews and a list of recent departures obtained by The Post.The departures, especially of old-guard editors, have current and former employees fretting that the financial news giant is in cost-cutting mode in preparation of a sale of its parent company, Bloomberg LP.“Ppl v worried about that today,” one former Bloomberg reporter told The Post in a text message. “We didn’t think news could stand alone as a piece of a company to sell. But who could buy the whole firm?”In the last week alone, at least four senior editors have been laid off, according to sources.They include Bob Brennan, a markets editor first hired in 1993; John Lippert, a senior writer who covered the auto industry, first hired in 1995; Chuck Stevens, most recently an editor at Daybreak, a fast-news product, hired in 1996, and Faris Khan, a senior editor covering corporate finance who joined in 2010, the company confirmed.Ty Trippet, a spokesman for Bloomberg, insisted that the headcount at Bloomberg has increased this year. He didn’t comment on recent departures"..
 

Former British Vogue Editors Turn TV Drama Producers
WWD: "Former British Vogue editors Alexandra Shulman and Fiona Golfar are now turning to script writing, to tell the story of the fashion media world.Shulman, who was the British title’s former editor in chief, and Golfar, who was its editor at large, have teamed with production company Bad Wolf to develop a television drama series that will draw on their 25-year tenure at Vogue. Set in the Nineties, the series will zoom into the inner workings of a British monthly title, dubbed Gold Dust Nation, and explore the lives of the stylists, journalists and designers associated with the title in a pre-digital world.Through the prism of the magazine, the series will also aim to explore key events of the decade from Thatcher’s reign, to the emergence of a post-recession new world order and new feminism"...
 
WWD 

Tina Brown's Memoir Optioned for TV Series
NY Post: Tina Brown's memoir, “The Vanity Fair Diaries,” has been optioned by “Big Little Lies” producer Bruna Papandrea for a limited TV series.“Blindspot” writer Rachel Caris Love is penning the pilot." Brown "made many enemies as the editor of Vanity Fair, she said at a Tuesday night talk at the 92nd Street Y with Jay McInerney.Brown was only 30 in 1984 when she took over the failing Vanity Fair and turned it around while fending off backstabbers in the hypercompetitive Condé Nast offices.She told McInerney — whom she once dispatched to Tangier, Morocco, to profile Paul Bowles — 'It was the court of Louis XIV. It all revolved around the Sun King, Si Newhouse.' Since Newhouse’s death last year, the magazine empire has been decimated by layoffs and budget cuts, assumed to be aimed at making it more attractive to potential buyers. Brown also made enemies among the people the magazine covered, including a billionaire whose beauty-queen wife was mentioned in a story about the notorious Parisian procurer, Madame Claude.She became adept at mollifying angered targets without running a retraction or being sued"...
 

High Times Extends IPO Deadline, Again
NY Post: "For a second time in recent months, High Times Holding said it has extended the deadline for its crowd-funded IPO — from Nov­. 30 to Jan. 31, 2019.The company, which needs to raise at least $14.7M before it can trade on a public exchange, said it is getting closer to its goal, reporting it has raised $13.2M from 15,000 shareholders thus far. More important, it has apparently gotten a reprieve from one big debt holder — the original founders who sold majority control of High Times magazine and the cannabis- events business to private equity firm Oreva Capital, headed by CEO Adam Levin. They were still owed $28.5M, but agreed to take a 25% haircut and exchange the remaining $18M debt for equity. But they have an out if the company still has not begun trading on a public exchange by Jan. 7."
 

Adult Book Sales Flat, But Paperbacks Up, in October
PW: "Sales of adult books were flat in October compared to October 2017, according to figures released by the AAP as part of its StatShot program. Sales in the children/young adult segment fell 6.8% in the month compared to 2017. In adult books, sales of downloadable audio jumped 37.6% in the month, while sales of e-books had a rare monthly sales gain, with revenue up 3.0% over last October. For the first 10 months of 2018, e-book sales from reporting publishers were still down 3.3%. Mass market paperback was the only adult print segment to post a gain in October, with sales up 3.2%. For the first 10 months of 2018, sales in the adult category rose 4% over the comparable period in 2017. The October decline in the children/young adult category was due to a 19.7% drop in hardcover sales compared to a year ago. Like in the adult segment, e-books had a good month, with sales up 17.3%. For the January through October period, sales in the segment were up 1.8% over the same time period a year ago. Sales for all 1,080 publishers who report results to the AAP were down 0.8% in October and were off 0.7% in the year to date. Religious presses have had the best year so far, with sales up 5.2%, while adult trade book sales increased 4.0%. Sales through November were down for both educational categories."
 

CEO Details Random House, Crown Reorganization
PW: "Six weeks after being named to lead the combined Random House and Crown Publishing groups by Penguin Random House U.S. CEO Madeline McIntosh, Gina Centrello has released the operating structure of the united group, which will be known as Random House. According to a memo from Centrello, the structure, editorial direction, and imprint teams of the Random House publishing programs are unchanged. Crown will continue to be comprised of three distinct imprint groups: Crown Trade; illustrated and prescriptive nonfiction; and Christian, business, and conservative book publishing. Going forward, the Crown trade and the illustrated and prescriptive nonfiction imprints will be co-led by David Drake and Aaron Wehner, and Tina Constable will continue to lead Christian, business, and conservative publishing.In recognition of his new roles, Drake has been promoted to executive VP, Crown Publishing, and publisher of Crown, responsible for Crown, Crown Archetype, Hogarth, Tim Duggan Books, Three Rivers Press, and Broadway Books. He will additionally take an active role in helping to direct the acquisition and publishing strategy for the imprints under Wehner, who has been promoted to executive VP, Crown Publishing, and publisher of Clarkson Potter, Ten Speed Press, Harmony, and Rodale Books. In addition, Centrello wrote, Wehner will take on shared responsibilities in the Crown trade areas, 'bringing his strong aesthetic orientation and wide-ranging editorial interests in support of David’s imprints.' Centrello noted that each of the imprints Drake and Wehner oversee 'will continue to publish independently, as they individually and collectively benefit from the ongoing supportive collaboration and shared oversight the two of them have long enjoyed. The synergies from their shared leadership and responsibilities—including acquisition strategy, production aesthetics, and marketing vision—will help grow their lists and our overall business.' In continuing to oversee Crown’s Christian, conservative, and business divisions, Constable has been named EVP and publisher of WaterBrook, Multnomah, Image, Convergent, Currency, and Forum.Drake, Wehner, and Constable will all report to Centrello.Centrello has also hired Gillian Blake as SVP and editor-in-chief of Crown Trade. She will start on Jan. 22, reporting to Drake. Blake has most recently served as editor-in-chief at Henry Holt.A casualty of the changes is Molly Stern. The senior v-p and publisher of Crown will be leaving the company, Centrello announced"... Article lists additional promotions.
 

OTHER NEWS OF NOTE:




Retail News


Amazon Planning Cashierless Stores in Airports
Reuters: "Amazon is looking at bringing its futuristic checkout-free store format to airports in an effort to win business from hungry, time-pressed travelers, according to public records and a person familiar with the strategy. Amazon has opened seven of the stores to the public since January: in Chicago, San Francisco and its hometown Seattle, mostly catering to workers in nearby offices looking for a quick lunch. Amazon is evaluating top U.S. airports for new locations, according to public records requests to several airport operators. 'The lead for Amazon Go requested a meeting,' read a June 27 email from a technology adviser who supports Los Angeles International, the second-busiest airport in the country, to a concessions official. 'Interested?'... 'Yes. Thanks!' the concessions official replied. A few hundred miles north, in the heart of Silicon Valley, an account manager at Amazon’s cloud unit asked San Jose International Airport for a meeting and referenced Amazon Go, as 'one of many possibilities we can discuss.' After the June meeting took place, during which Amazon discussed how the stores work, an airport information technology manager wrote: 'I am looking forward to moving forward with the Amazon Go technology at the airport.' Officials from both airports have since told Reuters they had no further correspondence about Amazon Go and that the retailer would have to undergo a competitive bid process to become a concessionaire, as is typical. The company’s cloud unit, Amazon Web Services, has been in touch with airports for other purposes. The status of the Amazon Go effort is unclear." Amazon declined to comment.
 

Loblaw Rolls Out Loyalty Program for $99 Per Year
Financial Post: "Loblaw Companies Ltd. is launching its new loyalty program across Canada, offering an assortment of perks for $99 a year in an attempt to convince more customers to shop exclusively with its massive grocery chain — creating what one senior executive called a “loyalty loop.”The PC Insiders program, styled after the popular Amazon Prime (minus the streaming service), includes free “click and collect” grocery shopping, where customers order online and pickup at one of 600 designated locations, as well as free shipping on purchases from Loblaw’s Joe Fresh apparel brand and Shoppers Drug Mart.The program — available at $9.99 a month or $99 a year — is now available to the 16 million members who currently use PC Optimum, its free rewards program. 'It’s not 16M customers all at once,' said PC Financial President Barry Columb, who started PC Insiders and continues to oversee the program. 'But if we go out in the next six months and we put 100,000 customers into the program, we would be very, very satisfied.'The announcement Thursday comes after a year-long pilot ballooned to the point that Loblaw had to turn members away. When the pilot started last year, the plan was to open the program up to 5,000 hyper-loyal customers who already used Loblaws PC Optimum and the President’s Choice Financial Mastercard. Instead, Loblaw added 25,000 members after media attention and word-of-mouth saw prospective members signing onto a waitlist by the thousands. Even after expanding to 25,000, 3,000 people were still on the waitlist... The pilot saw members take to Loblaw’s new grocery pickup service, Columb said, with an average member using it 10-15 times during the year. Along with free shipping and grocery pickup, PC Insiders members get 20 per cent back in reward points when they buy baby products and Loblaw store brands like PC Organics and Black Label, as well as online purchases on Joe Fresh clothes and Shoppers luxury beauty products.The incentive on baby products seems strategic, said Stewart Samuel, program director at IGD Canada, since having children is often a 'key tipping point' toward online grocery shopping.Samuel called the grocer’s paid program a 'first-to-market initiative in Canada'"...
 

UNFI Sees Q1 Net Loss Despite Sales Gain
SN: "Net sales at United Natural Foods Inc. increased 16.7% in the first quarter of fiscal 2019 vs. same period one year ago. However, the natural foods distributor saw a net loss of $19.3M, a 163%drop from Q1 2018’s income of $30.5M, the company announced. CEO and President Steve Spinner said company officials were disappointed with the results—the first results reported since UNFI closed on its $2.9B acquisition of Supervalu in October... 'The acquisition was and is about the creation of value,' UNFI president/CEO Steve Spinner said. Over time, value of the combined companies will exceed the potential value of UNFI alone, he added. UNFI has achieved double-digit compound annual growth rates since he assumed those roles in 2008... Supervalu sales accounted for 7.8% of UNFI’s Q1 sales. CFO Mike Zechmeister said the softening of sales at Supervalu was greater than expected.UNFI’s gross margin was 14.4% of net sales in Q1, ended Oct. 27. For Q1 2018, the gross margin was 14.9%. The decrease in gross margin was due to higher inbound transportation costs and increased sales in the company’s Supernatural category, which consists entirely of Whole Foods Market. Because Whole Foods pays lower prices than other retailers, any increase of its sales as a percentage of UNFI’s sales causes a decrease in the gross margin.Sales to Whole Foods Market grew 20.4% over 2018 and made up 35.8% of UNFI’s sales. A year ago, Whole Foods was 34.7% of UNFI’s sales.Although sales rose 4.4% in the Independent channel, share dropped to 23.3% from 25.9%. Supermarket sales were nearly flat, with a 0.6% increase, but share was 24.7%, down from 28.6%.UNFI’s reported results were mixed in Q1, due in part to the Supervalu purchase. Operating expenses were $363.2M or 12.7% of net sales, vs. $312.1M or 12.7% of net sales in 2018. The cost of acquiring and integrating Supervalu was $69.8M, causing an operating loss of $18.8M. Without that expense, operating income would have been $51M or 1.8% of net sales, vs. $55.1M or 2.2% of net sales in 2018.One-time costs associated with the Supervalu acquisition are expected to be $125M this year, excluding the cost of selling the associated retail stores. However, in year 4, UNFI expects to save $185M"...
 

Publix Opens First On-Campus Store
PG: "Publix Super Markets Inc. has adapted its urban format for an on-campus store that opened Dec. 6 at the University of South Florida (USF), in Tampa – the food retailer’s inaugural store on a college campus anywhere in its seven-state market area, according to a published report.Similar to an urban-focused store that the Lakeland, Fla.-based grocer opened last year in downtown St. Petersburg, the approximately 28,000-square-foot location offers a large array of made-to-order and grab-and-go items, although the USF grab-and-go section is much larger than that of the earlier store... The store also stocks such USF-branded merchandise as balloons, T-shirts and tumblers... On the corporate responsibility front, Publix has pledged to work with the USF’s Feed-A-Bull program, which operates a food pantry for students"...
 

Walgreen In Next-Day Delivery Deal with FedEx
MNB cites a TechCrunch report that Walgreen "has signed a deal with FedEx that will allow customers “to get prescriptions delivered to their home as quickly as the next day. Customers will get a text notification when prescriptions are filled and can opt to get them sent to their home or pick them in one of the company’s locations via an Express pickup line.”What this means is that Walgreen is 'stepping up its services to compete with both established pharmacies and newcomers in the space. Walgreens’ chief competitor (and top U.S. chain) CVS struck a partnership with the U.S. Postal Service early this year. Like Walgreens Express, CVS’ offering runs $4.99 for a delivery, with a one- to two-day turnaround time.' Amazon, meanwhile, acquired pharmacy startup PillPack over the summer, with plans to disrupt the drugstore business with online prescription shipping.' Walgreen already offers same-day delivery in cities such as New York, Chicago, Dallas, Miami, Gainesville, Tampa and Fort Lauderdale, with plans to expand the list next year."
 

Hiring Slowed, Wages Increased in November
WSJ: "U.S. employers slowed their pace of hiring in November, but wage growth matched the highest rate in nearly a decade and unemployment held at a very low level, showing the labor market remains a pillar of strength even as the stock market and other economic signals flash caution.U.S. nonfarm payrolls increased a seasonally adjusted 155,000 in November, the Labor Department said Friday. The unemployment rate held steady at 3.7% last month, matching the lowest rate since December 1969. Year-over-year wage growth matched the prior month’s 3.1% pace as the best rate since 2009"...
 

Walmart Buys Art.com
MNB: "Walmart said yesterday that it is buying Art.com, described as one of the largest global online purveyors of art and wall decor, with $300 million in annual sales.Terms of the deal were not disclosed.It is, CNBC reports, the addition of yet another digital brand to its widening portfolio, and a way of “bolstering its home decor business.”Among the other digital brands that Walmart has acquired in recent years: Jet, Moosejaw, Bonobos, ModCloth, Eloquii and Bare Necessities.CNBC writes that Walmart “will continue to run Art.com as a standalone website and wouldn't comment on its plans to add merchandise from Art.com to Walmart stores. The website has roughly 2 million designs to chose from, and growing, according to Walmart.”Meanwhile, Twice.com reports that Walmart “has developed an expansive line of fashionable tech accessories that it’s selling exclusively” on its website.The story says: “Dubbed Motile, the lifestyle brand boasts more than a dozen products at launch, including a faux leather backpack and travel bag with embedded 10K mAh wireless chargers; QI wireless power banks and fabric charging pad; a foldable bluetooth keyboard; iPhone cases; and colorful Lightning cables with faux leather bands, sporty lanyards or tasseled keychains.”Walmart describes the collection as “smart accessories for an untethered world.” The story notes that “with Motile, Walmart may have taken a cue from Target, which last spring launched a private-label collection of boldly patterned headphones and accessories under the Heyday brand.” And, of course, there is the Amazon Basics line of accessories."
 

Former Tesco Execs Cleared of Fraud, Accounting Charges
NY Times: In London, "Two former executives at the supermarket chain Tesco have been acquitted of fraud and false accounting charges after a judge ruled there was not enough evidence for a jury to consider the case against them.The executives, Christopher Bush, who led Tesco’s British division, and John Scouler, an executive in the same unit, had been charged by Britain’s Serious Fraud Office after a 2014 investigation into accounting irregularities at the grocery chain.'While I am delighted that my innocence has finally been established, it is troubling that Mr. Scouler and I were ever charged,' Mr. Bush said in a statement. 'Put simply, these charges should never have been brought, and serious questions should be asked about the way in which the S.F.O. has conducted this investigation'.. The inquiry into Tesco’s accounts covered a period of about seven months in 2014. It was opened after the company announced that it had overstated its profits by more than 250M pounds (about $320M at current rates).At issue was the booking of profits prematurely and delays in logging expenses to pad out results. Tesco said at the time that it did not believe that any of those implicated had benefited personally, but eight executives were suspended and the chairman, Richard Broadbent, was forced to step down"...
 

Are Consumers Ready for a Cashless Society?
eMarketer: "Direct-to-consumer brands like Everlane and Bonobos, fast casual grain bowl chain Sweetgreen and beauty salon Drybar are just a few businesses that have adopted a cashless model.But are consumers just as eager to do away with cash?While digital-only businesses appear modern, there is a growing backlash to cash-free commerce as it becomes more common. Many perceive it as discriminatory to low-income consumers and the unbanked while cities like Philadelphia and Washington DC have been trying to pass legislation banning cashless merchants. According to a recent study by Cardtronics, 60% of US internet users said cash was the most available payment method for everyone, and another 90% viewed cash as essential to those without checking or savings accounts. What's more, roughly one-quarter (28%) of respondents said they prefer to pay with cash. Of that, a plurality (64%) reported feeling nervous when they didn't have cash on them. That said, the study found that the most popular payment method was debit cards (37%) while 20% of respondents said they preferred credit cards. Mobile payments (13%) and checks (2%) were preferred by a small minority.But these preferences are situational. Most consumers preferred cash for small purchases—essentially items between $20 and $30. And cash rules for many retail formats: fast food outlets, convenience stores and small businesses. Meanwhile, debit cards were most used at grocery stores and mass merchandisers. While digital payment methods aren't preferred by most US consumers, they are growing in popularity, particularly with younger shoppers. According to our estimates, 20.2% of the US population will use mobile payments this year, with the largest concentration among those ages 25 to 34 (34.9%).When Cardtronics asked respondents which payment methods they used in the past six months, 45% of millennials said they used digital means compared with 29% overall. Yet millennials' cash usage was on par with the average (89% vs. 88%), which implies that increased usage of Apple Pay, Android Pay and others hasn't lessened reliance on cash. At least for the time being.Only 19% of US smartphone users said they could go one year without using cash, according to a May 2018 Bank of America survey. Even so, 58% of these consumers predicted that a cashless society would be inevitable in their lifetimes, while 18% see paper currency disappearing within five years. A majority of US internet users said they wouldn't change their frequency of visits to a favorite restaurant if it went cashless, according to a January 2018 survey by CivicScience. Just 11% would go less, and 15% would stop altogether"...
 

How Eye Tracking Can Unlock Consumer Insights
In PG, Mike Bartels, senior research director for Tobii Pro Insight in North America, writes in part: "There’s no shortage of research out there on buying behavior, but eye tracking is the only method that delivers accurate and unbiased information on a person’s visual attention. Post-purchase interviews can solicit inaccurate answers because shoppers often make up information they can’t remember, or feel that there’s a right or wrong answer, and construct responses accordingly. With eye tracking, you can see exactly what elements a shopper focused on, and what other elements of the packaging or surroundings consumed their attention. A recent study conducted by the Food and Drug Administration and and eye-tracking research consultancy Tobii Pro Insight (see sidebar below) examined the attention being paid to nutritional labeling in the grocery store aisle. It revealed that the vast majority of time is spent on branding and product imagery, with less than 10 percent of total attention focused on the nutritional information. of the total time that shoppers spent visually engaged with a product. These findings suggest that there’s room for improvement in conveying important point-of-sale nutritional information to consumers.While the FDA sought to examine consumer engagement with nutrition-related information, there’s a plethora of other areas where eye tracking can be used to engineer the consumer journey in store"...
 

OTHER NEWS OF NOTE:








 
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