Dr. Oz Magazine Sells Out on Newsstands
Hearst Magazines, which co-owns Dr. Oz The Good Life with Dr. Mehmet Oz, said stores sold out of the original 375,000 copies of the first issue distributed to newsstands, which debuted Feb. 4 (cover price $3.99). Hearst Magazines president David Carey told WWD that it’s printed “tens of thousands” of additional copies for newsstand consumption. Carey said the pilot issue’s debut would now sell “well into the 400,000s” on newsstands. He also said that 110,000 new subscriptions have been sold since January, bringing the subscriber base to 160,000. Said the Dr. Oz launch is tracking very comparably to HGTV Magazine launch. (HGTV’s first issue sold 297,563 single copies and had total paid/verified circ of 702,711, per AAM. In 2H 2013, the title had 358,446 single copies and total paid/verified circ of nearly 1.3M. Food Network Magazine, another joint venture launched in 2008, now has 506,000+ single-copy sales and total paid/verified circ of 1.7M.) Despite Oz’s good showing thus far, Hearst isn’t yet ready to pull the cord and proceed to a regular frequency for the magazine before 2H 2014. Carey was optimistic, however, touting Oz’s second pilot issue, which goes on sale April 15. Like the first issue, it has pulled in 60 advertising pages. Carey said Hearst is still tinkering with small changes to the editorial sections, while also paying close attention to bringing together the “right” kinds of advertisers to reflect Dr. Oz’s brand. Carey laughed at the suggestion that print is on life support. “We have hundreds of thousands of people who have signed onto a new magazine, so I would say definitively not,” he said. “People like new products. There’s always more white space than you can imagine.” He added that Hearst hopes to launch another magazine by 2016, and is currently mulling over “two interesting concepts.”
Time Inc. Shuffles More Execs Ahead of Spinoff
Leslie Picard, who was president of branded solutions (in charge of multi-market solutions for major advertisers) is leaving Time Inc. She’s said to have been “big footed” by the arrival of Mark Ford, an EVP of ad sales; but she is immediately jumping to be an SVP at CNN, sources said. Separately, Jed Hartman, group publisher of Time, Fortune and Money, is going to name a new publisher at Fortune after all. The top sales job had opened up when Ford, in one of his last acts before moving away from the top executive job at Sports Illustrated, tapped Brendan Ripp to be the new publisher of SI. Ripp was VP of Fortune. Eric Danetz, chief revenue officer of Defy Media, is expected to be revealed Friday as the new publisher of Fortune, which is something of an upgrade from Brendan Ripp’s old job. “It’s a different role,” said Danetz. “Time Inc. is going through a transformation, so it is a very opportune time to go there.” One thing he’ll be working on is the launch of Fortune.com on June 1, when the magazine’s digital presence is no longer carried on the CNNMoney site.
Newsweek Stands By Disputed Bitcoin Cover Story
Hours after publishing Leah McGrath Goodman’s 4,500-word profile of a 65-year-old Temple City engineer named Dorian S. Nakamoto—who, Goodman claims, is the long-mysterious inventor of Bitcoin—the magazine faced a cascade of evidence supposedly contradicting the ambitious cover story of its freshly revived print edition. But Newsweek’s editor-in-chief tells Gawker that the publication stands by the story.
Condé Nast International Invests in Luxury E-Retailer
CNI has spearheaded a $20M investment into luxury online retailer Farfetch.com. CNI joins the company’s existing investors, Advent Venture Partners, Index Ventures and e.ventures. “Farfetch has a unique position, connecting boutiques around the world by e-commerce to sophisticated fashion customers like our magazine readers and website users,” said Jonathan Newhouse, chairman/CEO of CNI. “It’s a natural for Condé Nast.” Farfetch CEO José Neves said that the investment will be used to develop the store in new markets such as the U.S., Germany, Eastern Europe and Scandinavia, and to launch a Japanese-language website. Farfetch has annual sales of $129M.
Forbes to Launch Central America Edition
Forbes will launch a Central America edition in March featuring the wealthiest people in the region, reports Latin Times. Edition will have monthly distribution of 50K, of which 30K will be distributed equally across Costa Rica, Guatemala and Panama; rest to be distributed in El Salvador, Honduras, Nicaragua.
Bauer Staff Said to Be Nervous About New Editorial Honcho
Post’s Keith Kelly says insiders at Bauer Publications are said to be “jittery” over hiring of David Perel, formerly with American Media Inc., as new editorial director of In Touch and Life & Style. Bauer President Ian Scott said, “It’s inevitable that people are going to be nervous when they get a new boss, but I don’t think they should be. What they are getting is an editor with a lot of experience in the celebrity field who was nominated for a Pulitzer Prize.” Scott also said Bauer is taking an interest in developing more of a digital presence. Post reports Perel is replacing Daniel Wakeford, who came over from Britain 11 years ago to help launch In Touch, and became its editor. Two years ago, he was also tapped to oversee Life & Style. “Insiders” said he’d clashed with management over cuts in resources in recent months.
Time.com: Features Accessible Only to Paid Subscribers
The new site is designed to be a destination for 24-hour news coverage that will also house multimedia elements–as well as magazine features that will be available only to subscribers. The site’s three-column approach features a large middle section, which Time editors will populate with their must-read stories of the day. New site will also introduce large native ad units that unfurl as readers scroll among editorial stories. Some traditional display units are also getting a refresh, with ads for Citi pulling elements from a smaller display unit on the left side to a large box in the middle of the page.
Opinions: Should Brands Buy Media Properties?
Joe Pulizzi, founder of the Content Marketing Institute, penned a column asserting that we’ll soon see a “flood” of media acquisitions by brand marketers. eMedia Vitals editorial director Rob O’Regan responded with a column arguing that the potential advantages of such acquisitions would in most cases be outweighed by the reality that “when a brand buys a publisher, the value of the media brand decreases immediately, because it ceases to be an independent entity…As soon as marketers start infusing their ‘messaging’ throughout the editorial product of a once-independent brand, credibility goes out the window and the audience will churn, slowly but surely.”
OTHER NEWS OF NOTE:
Apple Seeks to Make ’Biased’ Price-Fixing Trial Judge Recuse Herself; Get Plaintiffs’ Motion for Summary Judgment Denied
Safeway, Albertsons Agree to Merge, in $9B Deal
Safeway and Albertsons have agreed to a merger in which AB Acquisition, the Albertsons parent controlled by a Cerberus Capital Management LP-led group of investors, will acquire Safeway for a total value to Safeway shareholders of $40 per share, or approx. $9.2B. Merger expected to close in Q4. Boise, Idaho-based Albertsons, fifth-largest grocery chain by share, has about 1,000 stores and 12 distribution centers, and estimated 2013 sales of $23B. Pleasanton, Calif.-based Safeway, the second-largest by share ($36.1B in 2013 sales), has 1,300+ stores located in the West, Southwest, Rocky Mountain and mid-Atlantic regions under banners including its namesake, Vons, Randalls and others. Combined company will have 2,400+ stores (vs. Kroger’s approx. 2,640), 27 distribution facilities, 20 manufacturing plants, and 250,000+ employees. No store closures are expected (although the two companies’ stores overlap to a degree, particularly along the West Coast, and they acknowledged that some stores might need to be divested to meet FTC antitrust requirements–see SN story link). Albertsons CEO Robert G. Miller will become executive chairman of the combined company, and Safeway president/CEO Robert Edwards will hold the same positions in the combined company. Miller said the merger will create a company with improved competitive positioning, better able to quickly adapt to local needs and consumers’ changing shopping preferences in regions across the country, as well as enable significant operational cost savings that will translate into price reductions for customers. AB Acquisition plans to fund the merger in part with debt financing of approx. $7.6B, equity contributions from its current investors and their affiliates, partners and co-investors of approx. $1.25B, and cash on hand of Safeway. Safeway shareholders will receive $32.50 per share in cash. Additionally, shareholders will have the right to receive net proceeds worth an estimated $3.65 per share from the sale of Safeway’s real-estate development subsidiary Property Development Centers, and the sale of Safeway’s 49% equity interest in Mexico-based retailer Casa Ley. In addition, the merger does not alter Safeway’s previously announced plan to distribute the remaining 37.8M shares of Blackhawk stock that it owns to its shareholders in mid-April. Safeway’s shares of Blackhawk, the gift-card company founded within Safeway and partially spun off last year, are to be distributed pro-rata to shareholders, with a current value of $3.95 per Safeway share. Bloomberg sources say Kroger ($98.4B in sales for year ended in February) approached Safeway about buying parts of the company (WSJ says Kroger was considering a bid as late as Wednesday), and approached Cerberus about buying some of Safeway’s stores after a Cerberus deal. Deal includes a 21-day “go shop” period during which other bidders can make an offer. If such bids emerge, Safeway has 15 days to negotiate with the bidder. (See below for more on Kroger vis a vis Safeway.) PG reports on the unions’ reactions to the Albertsons/Safeway deal announcement.
Supermarket News (deal news)
Supermarket News (store divestitures)
Progressive Grocer (unions)
Kroger Mum on Safeway Interest
Yesterday, during Kroger’s last quarterly earnings call not including results of its purchase of Harris Teeter, management declined to directly comment on reports that it was exploring a bid to acquire all or part of Safeway. “The model that we’ve outlined in terms of growing our business for our shareholders doesn’t require any type of mergers to achieve,” said CEO Rodney McMullen, when asked about the company’s stance on acquisitions. McMullen made his remarks just hours before Safeway and Albertsons announced that they had agreed to merge. But Kroger could potentially be considering a rival offer, or an offer for some of Safeway’s assets. In announcing the deal, Safeway president/CEO Robert Edwards said it was only considering rival offers for the whole chain, and any competing offer would have to pay at least $150M as a break-up fee to nullify the Albertsons agreement. Albertsons would owe Safeway $400M if it scuttles the deal. Kroger’s Q4 marked its 41st consecutive quarter of same-store sales gains (+4.3%, excluding fuel). Kroger saw ID sales gains in all areas, including double-digit gains in natural foods. Net income $421.9M on sales gain of 4.8%, to $23.2B, adjusted for extra week in year-ago period. For the year, net income $1.52B on sales of $98.4B, +3.9% adjusted for extra week in previous fiscal.
Jewel-Osco: Names Shane Sampson President; Buying 5 More Dominick’s
Sampson was previously president of Albertsons’ Boston-based Shaw’s division. He assumes the role that had been held by Jim Rice on an interim basis since January, when former Jewel-Osco president William Emmons retired. Rice will now be president of the company’s Shaw’s/Star Markets division. The change in J-O leadership comes at a time when the Chicago-area retailer is facing stiff competition from competitors including Whole Foods Market and Mariano’s. J-O also announced it’s buying five more of the shuttered Dominick’s stores in Chicago and its suburbs. Its parent, New Albertston’s, will invest approx. $100M in new projects and remodeling the stores. It previously acquired and remodeled four closed Dominick’s. SN provides more background on Sampson and Rice.
Fresh Marketing Closing 4 Stores
The Fresh Market will close three stores in Sacramento, Calif. and one in Houston, “in the coming days.” President/CEO Craig Carlock said company is refining its real estate plan to focus on increasing penetration in existing markets, and slowing pace of new-market expansion. Believes this will enable allocating capital, resources to opportunities “more in line with [its] historical returns.” Expects closures-related additional charges of $18M-$20M in fiscal 2014. It reported that Q4 sales rose 15.1%, to $425.8M, and comps +3.1%. For full fiscal, ended Jan. 26, net income -20.8%, to $50.8M, including the Q4 charge. Sales +13.7% to $1.51B; comps +3.2%.
Trader Joe’s to Settle ‘Natural’ Claims Suit
Trader Joe’s has agreed to a proposed $3.375M settlement to a class action lawsuit over alleged misuse of “natural” claims, according to a press release from the court-appointed settlement administrator Rust Consulting. The suit claims Trader Joe’s mislabeled private-label products as “All Natural” or “100% Natural” that contained certain allegedly synthetic ingredients, such as ascorbic acid, cocoa processed with alkali and sodium acid pyrophosphate. Trader Joe’s denies any wrongdoing and says its products were labeled in accordance with existing laws, but has agreed to the settlement to avoid further costs and inconvenience.
OTHER NEWS OF NOTE: