New Shakeup At G&J USA

Circulation Management, August 1, 2004

Byline: BARBARA LOVE

Cindy Still, the new executive vice president of consumer marketing at Gruner Jahr USA, has come in with a new broom and swept the company of much of its circulation top management.

Five circulation executives departed somewhat abruptly in June, including three who were dismissed and two who resigned, sources said. And circulators are perplexed over why.

G J USA has had a credibility problem with advertisers since discrepancies showed up in 2001 Publishers Statements for Rosie and YM. The Rosie incident, which involved huge numbers, led to the firing of the top circulation executive and contributed to the departure of the head of the company.

The recent circ department dismissals took place the day before new CEO Russell Denson announced in a memo to employees that a discrepancy was found in a six-month audit of Parents ordered by the company. The audit report from ABC has not been released yet.

While some sources blame the dismissals on this discrepancy, circulators point out that Still has put in her own choice of staff in the past.

Denson said in his memo to employees that "any reporting violation is serious."

"In hindsight, G J seems to be adopting a zero tolerance policy," said one circulator. But circulators interviewed find this hard to understand given that ABC considers Publishers Statements to be estimates.

In addition, observers are surprised that Parents went to the ad community with its findings. "Why stir this all up again when what was found was simply a small operational error?" said one circulator. "It's stupid."

Some speculate that the purpose of the disclosure was to reassure the ad community that G J is serious about being on top of any variances.

"This new disclosure will not help, of course, but we will redouble our efforts to reassure advertisers," Denson said in his memo. The finding shows "that the stringent safeguards we put into place work," he added.

Cindy Still was unavailable for comment at deadline.

"The ad community is very appreciative that they heard about the situation from Parents first," said Sue Geramian, spokesperson for G&J.

All three who were dismissed have fine reputations. Grace Dynan-Surdi, was the Fulfillment Management Association Hall of Fame winner in 2003. She is said to have been "the backbone of G J circulation on the business side." Bill Carter, consumer marketing director (Child and Parents), and Kristi Bassett, fulfillment manager, are considered "solid people, doing exemplary work."

Nicole Bowman resigned her position as consumer marketing director for Family Circle, in mid-June. Once "the golden girl" at G J USA, she was rumored to be getting a position at New York Magazine, but that did not materialize. She is considering other options, including starting her own consulting business. And last week, Larry Goldstein, circulation manager for Family Circle, resigned and took a post at The Sporting News.

The winners in the whole mess are William McCaffrey, who was in charge of agency and relationship marketing for G J USA. Reportedly, he will take on more responsibility, becoming circulation director of Inc., Fast Company, Parents and Child. And Caroline Villela, now circulation director of YM and Fitness, will add Family Circle. Reportedly the staff has been told these assignments are "temporary."

Is this a restructuring? "Any time you have this many people leave, you have to restructure," said one sourcewith knowledge of the players.