Time will release a special issue on Nelson Mandela, commemorating his life in words and pictures, including tributes by Richard Stengel, Bono and Morgan Freeman. The special will be on newsstands Monday, alongside the regular week’s issue (featuring Carl Icahn) and next week’s Person of the Year issue (to be published Dec. 11). This marks the sixth time that Mandela has appeared on Time’s cover.
Time Inc. Reduces 401(k) Match; More SEC Filing ‘Revelations’
CEO Joe Ripp announced that the maximum company match will be reduced next year from 7% to 5%. NY Post reports the move upped angst for those worried about possibility of more drastic cuts and layoffs in 2014 in order to slim down the company for the Q2 spinoff. Time Inc. will hold a quarterly management meeting Dec. 9, and internal buzz is that Ripp will tell executives and managers that he aims to cut $125 million in costs from next year’s budget. Separately–in a long piece offering more “revelations” from analyzing Time Inc.’s recent SEC IPO filing–Fortune’s Allan Sloan notes that the 401(k) match was boosted to its current 7% (from the previous 4%) to make employees whole for Time Warner ending the company pension plan in 2010. As for the filing revelations, they include: In their Time Inc. contracts, now-former CEO Laura Lang, now-former CFO Howard Averill and now-former general counsel Maurice Edelson stood to get $2.5M, $1.75M and $1.75M, respectively, if the spinoff took place. Lang will get the $2.5M; Averill forfeited his bonus when he became CFO of Time Warner; Edelson, who like Averill has moved to Time Warner, is still in line to get a bonus if the spinoff goes through. Sloan asserts that having such financial stakes for execs negotiating on behalf of a to-be-spun-off division represents “a serious conflict.” Another: Time Inc.’s subscription liabilities (listed under “deferred revenue”) total $485M, a figure equivalent to a years’ worth of cashflow for the company. Sloan’s been unable to find out whether this will be considered debt in the Time Warner/Time Inc. negotiations over how much debt is appropriate for Time Inc. to carry–and what, if anything, TW will give Time Inc. to offset that liability (TW has gotten the subscriber money, but could leave Time Inc. to foot the expense of fulfilling those subscriptions).
Condé Nast Venturing into Global E-Commerce
Condé Nast U.S. and Condé Nast International (CNI) have launched a new division devoted to e-commerce, naming Franck Zayan, who is currently responsible for the e-commerce activities of Galeries Lafayette, as president. Zayan will be based in London, and begin work Jan. 6. He will report to a newly formed, trans-Atlantic board that includes Charles Townsend and Robert Sauerberg, CEO and president of Condé Nast, respectively; Jonathan Newhouse, chairman/CEO of CNI, and Nicholas Coleridge, president of CNI. New e-commerce division marks the first time CN, CNI have collaborated on an undertaking of this scale. Zayan’s brief is to “explore and develop ideas which can serve our readers, users, advertising clients and business partners.” Newhouse said no decisions have been made about what the new e-commerce division will sell. “Franck Zayan is very experienced and knowledgeable with regard to e-commerce, and it will be up to him, with the support of the board, to determine the strategy and business plan,” he said. He added: Newhouse said: “I believe that sometime before the end of next year, we’ll be engaged in some sort of new business activity.”
Mansueto Said to Eye Forbes Media; Inc. Editor to Also Lead Business Side
Billionaire Joe Mansueto, founder of Morningstar and owner of Inc. and Fast Company parent Mansueto Ventures, rumored to be looking at buying Forbes Media. Meanwhile, Mansueto announced that Inc. editor-in-chief Eric Schurenberg will now also oversee the business side, replacing publisher and president Bob LaPointe, who will become EVP of new business development. A Post source claims that LaPointe (who cited the difficulties of commuting between NYC and Boston as the reason for the shift) had wanted to convert Inc. into a membership club built around conferences and seminars. No comment from those involved.
NY Post (Mansueto, Inc. leadership shift)
Adweek (Inc. leadership shift)
Rolling Stone Plans Site Covering Country Music; Print Issue Tie-Ins
Will launch a Rolling Stone Country site in Q2 2014. The new standalone site will cover the country music scene in the same way Rolling Stone does rock and pop music, according to Gus Wenner, director of Rolling Stone.com. The magazine is opening an office in Nashville with 10-15 editorial staff. To coincide with the site’s introduction, the magazine is planning a country-themed print issue, a first for RS. Also plans a country music print special priced at $12 to $13 for 2H 2014 (No plans for a regular-frequency RS country magazine.) “There’s a huge opportunity for us to expand the Rolling Stone consumer base by extending into country music,” said RS publisher Chris McLoughlin, who reports that RS will spend more than $1M on the new site in 2014. The site is aiming to hit 1M monthly unique visitors within its first 12 months. More than a quarter of U.S. adults are country music fans, and the segment’s album sales rose 4.2% last year (driving total industry revenue of $1B), even as alternative and R&B album sales declined. Rock album sales rose just 2%.
Infighting at Bloomberg
Bloomberg LP’s revenue tripled during the 12 years Michael Bloomberg served as NYC’s mayor, and they’re on track for a record $8.3B in 2013 and profits of about $2.7B. Still, there is anxiety: After three decades of full-throttle ascent, sales of its data terminals have flattened, and an organization that has never known anything but maximum velocity is now grappling with what it means to face limits. CEO Dan Doctoroff has recharted Bloomberg’s strategy. The terminal has been the source of 85% of its revenue and virtually all its profits. Doctoroff is trying to introduce “a discipline that would seem rudimentary in most companies but has been treated as heresy inside Bloomberg,” writes CNN Money. “His wild idea? Businesses other than the terminal need to make money.” But “even when Doctoroff has had the explicit backing of Mike–and the mayor speaks to the CEO every week, according to Doctoroff–he has been subverted by internal resistance and the occasional stumble. As a result, Bloomberg has sunk more than $2B into its diversification efforts with little to show for it so far.”
Bloomberg, NY Times Face Expulsion from China
The New York Times and Bloomberg are facing the expulsion after publishing a string of investigative reports that embarrassed the communist party. 24 journalists working for the media outlets could be forced to leave China in the coming weeks after officials stalled over renewing their visas. The situation is grave enough that VP Joe Biden publicly disagreed with China’s treatment of U.S. journalists, and met with the journalists concerned in Beijing on Thursday.
An Inside Look at the Evolution of Condé Nast’s Structure
In a speech, SVP, corporate controller David Chemidlin offered specifics on the stage-by-stage overhaul of Condé’s structure since the dark days of the 2009 recession. Also outlined its 7 driving strategic priorities: building consumer relationships; investing in multimedia; licensing and marketing; capitalizing on digital and mobile; building Web profits; enabling talent via new management models; and optimizing print (still 80% of Condé’s business). He also noted that Condé editors continue to report to an editorial director, Tom Wallace. “We want the editors to have a place to go when they are feeling pressure from their publisher to write a particular article,” he said. “We are going to try to stick to that.”
US Weekly in Holiday Partnership
US Weekly and jewelry retailer BaubleBar will next week hold a five-day holiday gift shop, sponsored by Kahlua. The shop, to be at Baublebar’s New York boutique, will offer first-time customers 20% off their in-store purchase with the code USWEEKLY20, per an US press release. Shoppers will get personalized style guidance and complimentary manicures and Kahlua cocktails/treats.
Hearst Digital Among Presenters at FTC’s Native Advertising Workshop
MediaShepard: Hearst Magazines Digital Media SVP and chief revenue officer Todd Haskell offered examples of content created for Ugg shoes and Nordstrom which “take into account what we know makes readers take action.” Harper’s Bazaar readers can browse curated collections of “cosy chic” shoes on the magazine’s site or social media and share or purchase. Haskell said Hearst is completely up front about labeling advertorial content as such. Other media and brand executives (including P&G) also shared examples, and all stressed that they view transparency about the commercial nature of their content as crucial to preserving consumers’ trust. But one session highlighted several potential problems, including that seniors and non-native-English speakers have a tougher time recognizing native advertising. Native ads can also be harder to identify on smaller screens with slower download times (often the principal means of accessing the Web for lower socioeconomic groups), according to Michelle De Mooy of the advocacy group Consumer Action. Separately, Ad Age reports on the spirited arguments pro and con that flew during the FTC workshop.
S&S, Reader’s Digest Expand Book Distribution Agreement
Simon and Schuster announced that it will now handle sales and fulfillment for all adult titles published by Reader’s Digest. The deal, effective Jan. 1, covers U.S. and Canada, and expands on the companies’ current agreement for the sales and distribution of Reader’s Digest Children’s Publishing titles, which S&S has handled since 1999.
OTHER NEWS OF NOTE:
Online Medium Magazine Redesigns Platform
Jana Reduces Safeway Stake
Jana Partners, the activist hedge fund that acquired Safeway shares seeking to influence decisions to divest properties, has reduced its stake in Safeway to 4.1% from 6.2%, it said in a regulatory filing. The sale follows Safeway’s announcement that it would sell its Dominick’s stores in Chicago. Jana in September revealed its acquisition of shares, saying it hoped to influence the retailer to exit “subscale and low margin geographies.” Safeway’s stock has increased by around 20% since Jana announced its stake.
Chicago Task Force Seeks Buyers for Dominick’s Stores
Representatives from the Chicago City Council, city departments and industry experts have formed a task force to recruit buyers for 57 Dominick’s stores, the mayor’s office says.
15 of 72 stores in Chicago have been sold, and unsold stores are scheduled to close Dec. 28. “It is essential…that these stores are returned to active use, so we can minimize impact on food access in our communities and
ensure that these economic anchors continue to benefit our neighborhoods,” said Mayor Rahm Emanuel.
Dollar General Eyes Product Productivity
Dollar General Corp. said its goal over the next couple of years will involve maximizing product productivity. Speaking to analysts, chairman/CEO Rick Dreiling said the focus will be on SKUs “and really understanding their productivity. We’re now getting into the process of evaluating not only the SKUs but also the categories we have in the store.” Dreiling also said DG plans to maintain its EDLP approach, despite increased promotional activity from some competitors. DG also evaluating the benefits of adding gas stations at its DG Markets after testing a fuel station at a single location in Alabama during the past three months. And plans to authorize an additional $1B in share repurchases. For Q2 ended Nov. 1, net income +14% to $237.4M, sales +10.5% to $4.4B, same-store sales +4.4%. For the 39-week period, net income +10.7% to $702.9M, sales +10.1% to $13B, same-store sales +4%. DG raised its financial outlook for the year, projecting EPS in the range of $3.18 to $3.22, from previous guidance of $3.15 to $3.22. Sales projected to increase 10%-10.5%, vs. earlier projection of 10%-11%. Comps likely to increase 4%-4.5%. Capital expenditures are projected at $550M-$600M, down $25M in earlier guidance, as it’s been able to reduce the cost of new stores and remodels. Both traffic and average ticket increased for the 23rd consecutive quarter, with perishables and the addition of tobacco products the primary reasons for traffic growth through the third quarter.
Giant Eagle Opens 1st Market District Express
Giant Eagle has launched Market District Express, a test combination of a grocery and a convenience store. The 15,500-sq.-ft. store in Pittsburgh features a drive-thru
pharmacy, a cafe with beer and food service, a prepared-food department, self-serve frozen yogurt and an expansive beer section. Giant Eagle is also planning two Market District Express stores in Ohio.
Michigan Valu Land Closing
A Valu Land store is set to close in Dearborn, Mich. just 10 months after opening. The closure is the fifth in the state by parent Spartan Stores. The company is merging with Nash Finch in a $1.3B acquisition, but a spokesperson said the closures are unrelated.
AmazonFresh May Expand to S.F. Next Week
Based on a source, a job posting and sightings of AmazonFresh trucks, Amazon seems ready to launch its AmazonFresh service in San Francisco next week–expanding it from its current operations in Seattle, where it started, and Los Angeles, where it was rolled out six months ago. In S.F., AmazonFresh will face competition from major e-tailers such as Safeway, Walmart, Google Shopping Express and Instacart, a Sequoia Capital-backed startup that recently expanded to Chicago, and was founded by a former Amazon employee.
Major Grocery Brands’ Challenges in Md.
Montgomery County, Maryland is a microcosm of U.S. grocery business dynamics. Traditional grocers are losing share to competitors, from drugstores to specialty grocers. Giant had 45% of the grocery store market share in the Washington area about a decade ago, but has seen its share slip to 35% in the region. Giant’s share is 23% if you include the groceries sold by Wal-Mart, Target and Costco in the regional mix, though it is still a strong 37% in Montgomery, even with Target and others. Since 2008, Giant has renovated or replaced more than 145 stores in Maryland, Virginia, Delaware and Washington, D.C. Safeway, which has a market share of 14% in Montgomery, also has renovated or replaced numerous local stores. A new 60K-sq.-ft store in Wheaton is about twice the size of its predecessor
Amazon Leads Top 100 in Customer Satisfaction
Amazon is #1 (87 score) in new rankings of customer satisfaction from experience analytics company Foresee. Some other retailers’ scores: Sam’s Club 81; Target 77, Walmart 72. Rankings cover brands in seven industries.
Apple Guides Shoppers In-Store with iBeacon Technology
On Friday, Apple Inc. will begin using the technology in its 254 U.S. stores to send shoppers messages about products, events and other information tailored to where they are in the store (shoppers must have downloaded the Apple Store app and given Apple permission to track them). Using the iBeacon feature, the app will notify you if the computer you ordered is ready to be picked up, for example. Show a clerk your screen with the order number, and the clerk will get it for you. Walking by an iPhone table? You may get a message asking if you want to upgrade, check your upgrade availability and see if you can get money for trading in your old phone.
OTHER NEWS OF NOTE: