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Paint a big red
'For Sale' sign on G+J
Read 80 job cuts as move
to boost curb appeal
When Russell Denson was named in May to
take over for the ousted Dan Brewster as head of Gruner + Jahr, the
question among a lot of magazine people at the time was, Russell
who?
After Brewster's massive belly flop over the Rosie
circ-cooking charges, it was expected that G+J would recruit a top
magazine industry insider, a big New York name, to right the company
and repair its tarnished image among irate media buyers.
Denson, though widely respected as a nuts-and-bolts
magazine executive, did not fit the image. He
was hired away from Reader’s Digest, where he was president and
CEO of Reiman Media Group, publishers of a group of ad-free magazines
based in Wisconsin.
But Denson had one great skill going for him, an ability to
patch up magazine companies for sale. And that's what it appears
he'll be doing at G+J.
Yesterday, at Denson's direction, the company cut 6o more
jobs from its payroll, roughly a tenth of its employees, while
freezing another 20 open positions. These cuts are part of a series
of measures, announced a few weeks back, aimed at chopping $25
million in costs. Denson at the time announced that he was also
scrapping the last of Brewster's ambitious plans for new magazine
titles.
G+J declined to comment on yesterday's job cuts, or
even release a statement confirming them. But a look at where those
cuts are taking place is revealing: largely in support and
administration, not from the magazines' editorial and sales staffs.
Those areas, support and administration, are already
thin, and they were so even under Brewster, according to company
insiders. It's hard to imagine further cuts unless Denson is ready
to unload or planning to unload either key titles, such as Family
Circle and YM, or sell off the entire company.
One published report has Denson's European bosses
giving him a year to turn G+J USA profitable.
But a top insider reports that G+J has already
approached Hachette with an offer to sell, only to be turned down
over price.
Meanwhile the exit of talent continues. Fitness publisher
Julie Pinkwater is reportedly out the door, off to join Meredith as
publisher of Ladies' Home Journal. A week ago, Dan Rubin resigned
after four years. He had been executive vice president under
Brewster.
Any hope Denson may have of bringing G+J into the
black will require heavy-duty magic at both YM and Fast Company, the
company's two most troubled titles. Cost-cutting alone won't be
enough.
The question is, can they be rescued, at what cost, and
over what period of time?
Through July, YM's ad pages were off by 45 percent,
with revenues based on its rate card off a like amount. Fast Company saw
a 26 percent decline in ad pages during that period.
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Sept. 10, 2004
©
2004
Media Life
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