Hearst Magazines to Anchor Office Building in Easton, Pa.
The Morning Call: Hearst, which bought Emmaus, Pa.-based Rodale in January 2018, will anchor a $10M, 42,000-sq.-ft. Class A office building on South Third Street in Easton, Pa... "Hearst plans to occupy the first floor. The company had hoped to move into the space by spring, but developer Lou Pektor said delays happened over negotiations for the use of the additional space, meaning a new second floor had to be added to the structure. Pektor, of Bethlehem’s Ashley Development Corp., also said Hearst’s use is “tenant specific,” requiring customized “fit and finish'... messages left with [Hearst] were not returned... Workers from Hearst’s Enthusiast Group -- Pektor called them a collection of product developers and technology experts — will move into the building, some coming from the company’s leased space in Center Valley, others from New York City... "It's not back office. They’re well-paying jobs" [said Pektor]… Pektor said Ashley has an application with the state for $750,000 in state funding for what he called specialized interior work. Two local financial institutions, American Bank and Merchants Bank, are financing the project... Hearst Corp. is the 24th-largest private company in the country, according to Forbes. The latest ranking shows Hearst had $10.8B in sales and approximately 20,000 employees."
Magazine Writers Cash In On Streaming Services' Hunger for New Content
Bloomberg: "In 2018 the number of scripted TV shows neared 500... That’s more than double the a decade ago...Articles that studios used to pay $5,000 or $10,000 to option are now going for $20,000 to $50,000. A few have even sold for north of $100,000. And that’s just for the right to develop the article into a TV show. The purchase price—the writer’s fee if the studio produces the project—now routinely surpasses $350,000, and has climbed as high as $1M... The figures may escalate as new streaming services from AT&T, Walt Disney, and Apple enter the market. Some of the new services are already corralling articles for development. Apple Inc. is developing an anthology series entitled Little America that’s based on articles that appeared in Epic Magazine... How derivative entertainment revenue gets split up is now a common source of friction during contract negotiations between writers and news organizations. Vox and Condé Nast (owner of the New Yorker, Wired, and GQ) have formed entertainment divisions that are capitalizing on the boom. Condé Nast is producing Last Chance U, based on a 2014 GQ article, and Fastest Car, an original production, for Netflix"... TV presents a high-paying alternative to the world of magazines, where stories can sit with an editor for months and the number of issues published every year dwindles. Stories can languish in Hollywood forever too, but at least the writer gets paid every time a studio puts something in development"...
Conde Nast Sets Up Pop-Up Outside Upfronts
MediaPost: "The Condé Nast NewFront, held a few weeks ago, centered around the magazine publisher's new tagline: “the new prime time.” Condé Nast took this message to the streets of New York, setting up installations outside of the upfronts to attract media buyers and executives heading to presentations by the biggest TV networks showcasing their programming. Eric Johnson, SVP of marketing at Condé Nast, called the activations a “physical manifestation” of the campaign touted at the publisher's NewFronts and in trade publications like Adweek. Condé is playing marketing videos on 80 digital screens across the city in areas “where people are moving around the Upfront locations,” such as subway platforms and a 155-foot billboard in Times Square, Johnson told Publishers Daily. “We are canvassing Manhattan in key locations where those folks are attending the upfronts,” he added. “Brand ambassadors” were spread out at specific subway platforms, as well as coffee shops in the area, wearing and giving away T-shirts that read “Condé Nast The New Primetime.” The company also set up pop-up “living rooms” outside of Upfront locations. The house-shaped installation features a home-like setting, with a TV behind the couch displaying Condé Nast’s marketing video. In a deliberate move, Condé Nast staff have their backs to the TV while on the couch. Instead, they are interacting with mobile devices like iPads and tablets from the couch, displaying Condé Nast video content. The installation serves “as a reminder to a lot of those traditional TV buyers that there are new ways to reach audiences,” Johnson said. “Consumption habits are changing,” he added. The message is “follow the content and put yourself where the user is.” The “living rooms” were set up in Dante Park, across from ABC’s Lincoln Center event on Tuesday, and outside of CBS’ event at Carnegie Hall on Wednesday. Today, the pop-up is in the lobby of One World Trade, where Condé Nast is located and “a major agency" calls home. There was a “positive reaction” to these efforts, he said. Executives stopped and asked questions. At the NewFronts, Condé touted 50 returning video series from 2018 to 2019, and 175 new pilots slated for release over the next year. The publisher claims 14B digital video views in 2018, and launched two OTT streaming channels. “We are providing more ways to engage with content,” Johnson noted. Condé also partnered with Nielsen to provide third-party measurements. Condé commissioned a study from the metrics company that found an average 15% lift in brand familiarity and 36% lift in purchase intent from its digital video audience. The marketing campaign will culminate with an activation at the InterContinental Carlton Hotel at the end of June for Cannes Lions, Johnson said."
Mueller Report Has Third Bestseller
PW: "Melville House’s mass market paperback edition of The Mueller Report sold 13,538 copies in its first week on sale at outlets that report to NPD BookScan. The report was easily BookScan’s top-selling mass market paperback last week, outpacing the title in second place by almost 13,000 copies. The three Mueller Report print editions now on the market sold more than 56,000 copies last week. Scribner’s edition, with analysis by editors of the Washington Post, was the top seller, selling over 31,000 copies in the week, followed by the Melville House edition. In third place was the Skyhorse version, which includes an introduction by Alan Dershowitz. It sold more than 11,000 copies last week. Altogether, the three editions of The Mueller Report have sold approximately 180,000 copies at outlets that report to BookScan since the Scribner edition hit the stands in late April."
OTHER NEWS OF NOTE:
Lidl Plans 25 New Stores on East Coast
SN: "In the wake of an acquisition planting itself firmly in metropolitan New York, Lidl US has unveiled an East Coast expansion strategy calling for 25 new stores.The hard-discount supermarket chain said Friday that it plans to open the new stores in Maryland, New Jersey, New York, North Carolina, Pennsylvania, South Carolina and Virginia by next spring. Including that expansion, the company expects to top the 100-store mark in the United States by the end of 2020, with locations in nine states. “We are committed to long-term growth in the U.S. and always strive to locate in the most convenient locations for our shoppers,” Johannes Fieber, CEO of Arlington, Va.-based Lidl US, said in a statement. “These new stores are part of the next steps in our U.S. expansion.” The upcoming locations, expected to create more than 1,000 new jobs, include seven stores in Maryland, six in North Carolina, four in Pennsylvania, four in New York, two in New Jersey and one apiece in South Carolina and Virginia. This summer, Lidl also plans to shut two stores in Rockingham and Kinston, N.C. The company said employees will be offered the opportunity to relocate and work at stores in other areas. Earlier this week, the retailer announced a hiring event to fill 100 new positions at its regional headquarters and distribution center in Alamance County, N.C.Currently, Germany-based Lidl operates more than 65 U.S. stores in Virginia, the Carolinas, Georgia, Maryland, Delaware, New Jersey, Pennsylvania and New York... Of the 25 stores slated to be opened, four are in Long Island, N.Y. Those locations, due to open in early 2020, will include the first converted stores from Lidl’s acquisition of community grocer Best Markets.Under the deal, which closed earlier this year, Lidl purchased 27 Best Market stores, including 24 on Long Island, two in New York City (Astoria and Harlem) and one in Holmdel, N.J. The first Long Island locations will include brand-new stores in Plainview and Center Moriches and converted Best Market stores in Huntington and Babylon"...
Publix Pumps Up HQ Expansion Plan
The Ledger: "expansion at Publix’s Lakeland [Fla.] HQ will be bigger than expected. And with that larger addition, comes a bigger tax break.Initially, the value of tax breaks was estimated at $163,208 each year for 10 years based on the company spending $28m. Now, the $36B company plans to spend $65M on its expansion... The supermarket chain’s director of tax and treasury sent Howard a letter earlier this year explaining that their original economic development property tax exemption form was preliminary. “The increase in costs are due to approx. 30,000 square feet of necessary building space to accommodate our projected job growth, construction and equipment cost inflation, and finished interior costs,” wrote Chris Mesa, a director of tax and treasury... the company still plans to create a minimum of 700 high-paying jobs in Polk. Construction on the expansion is expected to begin this fall, according to records, which show that in 2020 Publix plans to purchase office equipment valued at $13M and computer equipment worth $6M"...
Fred's Discount to Close 104 More Stores
CNN: "Discount chain Fred's is closing 104 more stores by the end of June. The Memphis-based retailer said Thursday the closures are in addition to the 159 stores it said in April it was closing. Between the two waves of closures, Fred's is reducing its store count by nearly half.... The soon-to-be shuttered stores are located in Alabama, Georgia, Illinois, Florida, Louisiana, Mississippi, Missouri, Kentucky, South Carolina, North Carolina, Tennessee and Texas. Liquidation sales begin Thursday and the company aims to have them closed by the end of next month. Once the closures are completed, Fred's will have roughly 300 stores left. Earlier this year it had 557 stores, primarily across the southeastern U.S. The 72-year-old company, which sells items like food and household cleaning supplies, is struggling to find a working strategy. Fred's is trying to get out of the pharmacy business. Walgreens bought Fred's pharmacy patient prescription files and inventory last year"...
Sprouts Sticks to Expansion Game Plan
SN: "Sprouts Farmers Market remains on track with its growth plan despite a pending search for a new CEO and the loss of another key leader to medical leave, Chief Financial Officer Brad Lukow said this week at the BMO Farm to Market Conference. Lukow and president and COO Jim Nielsen have been serving as interim co-CEOs since the Dec. 30 exit of CEO Amin Maredia, who left Sprouts to pursue other interests. The Phoenix-based specialty grocer has retained an executive search firm to help appoint a full-time chief executive. Earlier this month, Lukow announced during the company’s Q1 earnings call that Nielsen has taken a medical leave of absence... Lukow also noted that Sprouts’ leadership is on the same page in terms of the retailer’s expansion course. “There’s no disagreement with either the management or the board on our strategic direction... This year will see Sprouts continue its rapid growth. The fresh, natural and organic grocer opened about 30 new stores in 2018, and it’s targeting 28 new locations overall for 2019. Eight were opened in the first quarter and, so far, one of eight planned for Q2. Currently, Sprouts operates 322 stores in 19 states. The company expects to have 340 stores in 22 states by the end of this year."
UFCW OKs Shoprite, Acme Contracts in Pa.
SN: "Nearly 6,000 Philadelphia-area members of United Food & Commercial Workers (UFCW) Local 1776 Keystone State this week ratified new union contracts with ShopRite and Albertsons Cos.’ Acme Markets chain. UFCW Local 1776KS said more than 2,500 workers for six ShopRite employers yesterday voted in favor of a five-year pact that safeguards benefits, raises wages, expands non-discriminatory language, requires earlier notification of scheduling and provides additional shop stewards"...
Industry ‘Disappointed’ by Final Drug-Pricing Rule
PG: "The Food Marketing Institute (FMI) and the National Grocers Association (NGA) have voiced their “disappointment” regarding a final drug-pricing rule released May 16 that, according to the organizations, fails to reform pharmacy direct and indirect remuneration (DIR) fees.“The administration missed the mark and an opportunity to effectively lower beneficiary out-of-pocket costs, while also stabilizing the operating environment for retail pharmacies,” noted Peter Matz, FMI’s director, food and health policy. “Specifically, DIR fees are being used strategically by pharmacy benefit managers to recoup funds from pharmacies retroactively, often weeks or even months after prescriptions were filled. According to the proposed rule itself, these fees have increased 45,000% in recent years. And, in an industry that operates on razor-thin profit margins, supermarket pharmacies have virtually no ability to absorb these unexpected costs.”Matz added that the association “will be looking at all options, including congressional action, to address the anticompetitive practices that are driving up drug prices and threatening both supermarket pharmacies and the customers they serve.”FMI member companies operate nearly 33,000 retail food stores and 12,000 pharmacies, with independents operating about 3,000 of them.In January, NGA, which advocates for the independent grocery sector, filed comments on the then-proposed rule, in which it warned that DIR fees would adversely affect independents that operate pharmacies"...
OTHER NEWS OF NOTE: