Chicago hope, and gardens

Folio: The Magazine for Magazine Management, June, 1998 by Mike Hayes

With help from topnotch advisers, a no-nonsense approach to business and exhaustive market research, Chicago Home and Garden blossoms.

Occasionally, against all odds, an upstart magazine launched by someone with absolutely no experience in publishing succeeds. But what makes the early success of Chicago Home & Garden even more remarkable than its mere survival is the competition it faces from monthly magazines such as Primedia's Chicago, the largest paid-circulation city magazine in the country, and North Shore, from Chicago Sun-Times publisher Hollinger International. Apparently, what CH&G founder Mary Semmer, lacked in experience when she launched the quarterly in 1995, she made up for in research skills, financial acumen, impeccable timing and a pragmatic approach to the publishing business.

In essence, Semmer, built a small but successful magazine business by isolating a segment of Chicago's and North Shore's advertising base, and exploiting it with the help of some seasoned professionals.

"Mary was able to find a crack in the seams that nobody was covering in the Chicago area," says circulation consultant Walter J. Riley, who helped develop strategies at CH&G. Riley had previously helped launch Southern Progress Corp.'s Southern Accents and was listed on the masthead of Veranda, an interior-design magazine based in Atlanta. "I was looking for someone with experience in my field [of shelter magazines]," says Semmer.

While researching the viability of CH&G, Semmer, counted ad pages in Chicago and North Shore and "concluded that about 25 percent of their ad revenues were coming from advertisers that would fit very nicely in our mix. Those advertisers were already spending money in magazines that were not as targeted as ours," says Semmer, emphasizing the local focus of her magazine versus the broader lifestyle coverage of the competition. "Anybody who picks up our magazine is predisposed to our field--it's a pre-selection process."

One of CH&G's most loyal advertisers is Porters of Racine, an upscale furniture store in Wisconsin. Although Porters also advertises in both Chicago and North Shore, Porters' former advertising director, Sandra Ellegard, says Semmer's personalized approach to marketing the magazine stands out among the rest. Encouraged by Semmer, Porters sends CH&G subscriptions to its largest customers as a promotional vehicle. "It was a brilliant idea, because they loved it," says Ellegard. "We got thank-you cards and everything."

While complimenting CH&G's visual presentation, North Shore publisher Ted Biedron questions the appeal of its frequency, especially for retailers. "When there's money left on the table, that's when a quarterly kicks in," says Biedron.

Smart money

Apparently, advertisers have some money left on the table. With just three signed on for the magazine's premier issue in the fall of 1995, Semmer, insisted all advertisers pay the full rate. "We don't give away anything around here--paper is too expensive," she quips. Semmer, insists her magazine's affluent readership and refined editorial focus justify such a no-nonsense approach. "People may read national magazines, but they buy locally," explains Semmer, who has an MBA in marketing and finance from Northwestern University's Kellogg Graduate School of Management. "That's especially important for gardening topics, which can be very regional-specific." Subscribers will account for about 35,000 of the magazine's 50,000-copy distribution for the magazine's summer 1998 issue, which was mailed out May 1; the remaining 14,000 copies are sold on newsstands and through about 30 independent retailers, such as local gift shops and furniture outlets. "The sell-through in those stores is incredible because we're the only magazine on the counter," says Semmer. About 1,000 copies are reserved for the advertising department and for distribution at local home and garden shows, antiques shows and other events.

Semmer's pragmatic business approach was critical to CH&G from the start. "If you don't understand the rudiments of financing something, you're in trouble," says Semmer, who bankrolled the inaugural issue with a personal investment "in the low six figures" and later secured a loan from the Northern Trust Co. in Chicago. "It's almost as important as wonderful editorials. Magazine publishing is like any other business: If you don't have enough money, don't start. It won't magically appear."

Semmer didn't have magical forces behind her, but she did have connections. She worked as a commercial loan representative for the Northern Trust Co. for several years, and went through training with some of the people who reviewed her bank loan application.

Very early on, CH&G showed signs of financial success. Although large publishers generally look for profitability within three to five years of a launch, Semmer's start-up broke even in its first year, and earned a modest profit in its second, she says. Revenues reached about $600,000 in 1997: about 10 percent from newsstand sales, 15 percent from subscriptions and 75 percent from ads.