Times change

Folio: The Magazine for Magazine Management, March 15, 1997 by Jeff Garigliano

Gruner+Jahr's integration of The New York Times Company Women's Magazines division into its culture has been a three-year, very public, pitched battle, but it finally looks like peace--with profits--is at hand.

More than a few eyebrows were raised when Gruner+Jahr USA Publishing paid $325 million for The New York Times Company Women's Magazines division in July 1994. It wasn't the premium price that people questioned so as much as G+J's ability to integrate and manage all the new titles. Before that, the company had been a relatively small player in U.S. publishing, with just two titles: YM and Parents. But with a single purchase, G+J suddenly became America's seventh largest magazine publisher, quadrupling its size overnight and picking up several established franchises, including Family Circle and McCall's. There were indeed growing pains after the acquisition, but now, nearly three years later, the changes New York City-based G+J implemented are paying off. Four of the company's seven magazines--YM, Fitness, Child and American Home-Style & Gardening--reported ratebase increases in both 1996 and 1997. Ad pages were up last year for Parents, YM and Fitness. And with the titles repositioned the way G+J wants, the company is making noise in the market, pitching its titles to advertisers as a cohesive group essential to reaching female readers.

G+J USA's parent, Gruner+Jahr AG & Co. of Hamburg, Germany, is of one of Europe's biggest print media companies, with 72 magazines and 10 newspapers throughout Europe and the United States. The company, in turn, is the publishing arm of Bertelsmann AG, a massive media conglomerate headquartered in Guetersloh, Germany (see sidebar).

As expected, the integration of the two corporate cultures, that of G+J and the New York Times Women's Magazines, was tough. "We spent the bulk of our time in the first 18 months getting the two companies put together and defining solid, clear strategies for each of the titles, with the right people in place to execute them," says John Heins, president and CEO of G+J USA. Heins worked directly with Axel Ganz, president of G+J's International Magazine Division, who oversees all G+J publishing outside Germany. Ganz is based in Paris, but he came to New York for six weeks in the summer of 1994 to formulate strategy.

The first question the two executives asked, before considering changes at a specific magazine, was whether the company even wanted to remain in the market in question. In the case of Mary Emmerling's Country, it did not; the title was quickly shut down. G+J also sold its construction trade group, including two titles and a conference, to Miller Freeman. That left a group of seven consumer magazines--Family Circle, McCall's, Parents, Child, Fitness, YM and American HomeStyle & Gardening--all in the women's market. Heins and Ganz then put together an eight-year development plan for each of the magazines. Some titles received only minor alterations; others were drastically reshaped.

American HomeStyle & Gardening is a good example of the total makeover. Three years ago, "there was no real uniqueness to it," Heins says. "It was one of dozens of shelter magazines that had no real core or unique summing position." After the acquisition, change came quickly. At Heins' direction, editor Karen Saks added editorial pages and new sections on entertaining and gardening (the title was formerly called American HomeStyle). The magazine also started running how-to articles with each of its interior-design spreads. Readers liked the new look. In 1994, American HomeStyle & Gardening had a ratebase of 700,000; in January, it went to 900,000.

Fitness is another example of significant change. Launched by the Times group in 1992, Fitness was a bimonthly struggling at 300,000 circulation just two years ago. Newsstand sales dropped steeply when the title went from bimonthly to 10 times a year. In redirecting Fitness, Heins started at the top. He replaced editor Rona Cherry with Sally Lee, bringing Lee over from the editor in chief slot at YM. He also reached into the G+J corporate coffers for money to build up the title. "We hope not to spend it all, but we're prepared to spend $20 million on Fitness before it gets right," Heins says.

Margery Gladstone, who's been the publisher of Fitness since it launched five years ago, says the infusion of capital went to doubling the title's editorial staff, buying better quality photography and increasing circulation. Fitness dropped two million direct-mail pieces in 1995, and another two million in 1996.

The Fitness ratebase jumped in January to 775,000, and Gladstone sees the million mark in the magazine's future: "We think 1.2 million, 1.3 million, is within striking distance." Ad pages for Fitness were up 20 percent in 1996 over 1995. Gladstone says she wants better rack positions for the title, and with money still to spend, she's likely to get them.

YM also exemplifies a dramatic turnaround, this one begun even before the Times acquisition. "YM had never been particularly successful [in the eighties]," Heins says of the title that G+J acquired in 1978. "We tried lots of different things." In 1990, the company commissioned research to find out what teenage girls wanted in a magazine. "Editorial research cannot make a magazine successful," Heins says. "On the other hand, ignoring what readers say they want is a pretty sure guarantee that you won't be successful." The research suggested that girls wanted the magazine to be more fun. Says Heins, "YM abandoned the notion that we needed to be a mother and needed to tell these girls what they should know. Instead, we said, `Let's tell them what they want to know.'"