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Condé Nast Still Pushing Toward Profitability
WWD: Condé Nast "still pulls in revenue around $1B a year, but has operated at a loss at least since 2017, as WWD has reported. It lost about $100M in 2019, according to a New York Times report... The profitability struggle continues under Roger Lynch, who joined the company in 2019 as CEO... [who] has slowly connected the international and U.S. halves of the business, particularly back-end functions and tech, eliminating hundreds of jobs in the process, including some executives, and reducing overhead costs. Editorial has been affected as well, with dozens of jobs at various titles cut year after year, allegedly with little to no severance... Some recent moves to reduce costs include declining to pay full rent, as Condé attempts to renegotiate the terms of its lease at its New York HQ within One World Trade Center... Another is the centralization of all editorial teams at each title, international and U.S... which also has the effect of further limiting budgets available per book. Staffers at Vogue, Vanity Fair, Condé Nast Traveler, Architectural Digest and GQ are expecting at least moderate cuts to their ranks, likely focused on international offices, as those titles have been put under new editorial leaders overseeing all regions... Content sharing among all editions will be more prevalent than ever... In a year-end memo to staff, Lynch said the company is looking to “amplify the best versions of stories across all markets, which will expand IP opportunities.” He added that the company is working to “clearly identify where and how we will grow our audience and map our teams accordingly. Specific plans of global action for each title are currently being developed." Additionally, any remaining curtain — be it between regions, print and digital, social and video, editorial and sponsored content or e-commerce — is said to be coming down entirely... to allow for “greater focus and collaboration.” And a major push for video and social content, purportedly in order to satisfy advertiser demand, is said to be sucking up budget money that would previously have gone into written content or magazine production. There is executive talk at Condé of 25% of revenue being “reinvested” in “content,” but over the next four years. And the money is expected to be heavily tilted toward video. Lynch said the changes will result in “double digit” revenue growth in 2021. But profitability is not yet certain, sources noted, or likely. Lynch... [told] staff in 2019 that advertising and content deals derived from [video] have the potential to be a new $1B revenue stream"...
Backlist Drives Print Book Unit Gains Higher Through February
PW: "Driven by strong backlist sales, unit sales of print books rose 26% last week over the week ended Feb. 29, 2020, at outlets that report to NPD BookScan. It was the largest week-over-week gain compared to 2020 so far this year, helping unit sales finish the first two months of 2021 with a 21.2% increase over the first two months of 2020"...
Vogue Italia Cover Is Turned Into Art Project
WWD: An all-white cover for Vogue Italia's April issue last year has now been turned into an art project that's being featured in this month’s edition of the magazine. "At the time, the totally white cover — the first in the publication’s history — intended to represent a sign of respect, rebirth and hope as a reaction to the pandemic. When it hit newsstands last spring, independent art curator Valentina Ciarallo bought dozens of copies of the magazine and successively invited a group of Italian artists to use it as a canvas to express their creativity... Vogue Italia decided to celebrate her initiative and the 49 artworks with a dedicated story included in its upcoming issue, hitting newsstands on March 6"...
How Google's Latest Privacy Move Will Affect Publishers
MediaPost: "Google yesterday said it will stop using tracking technologies to identify web users as they visit different websites, a move that expands on its plan to end support for third-party cookies... Without referring to alternative user identifies by name, [Google's David] Temkin said Google won't offer an identifier based an email addresses -- an indirect reference to the Unified ID 2.0 identity solution spearheaded by ad-tech company The Trade Desk -- because Google doesn't believe such solutions will satisfy consumer demands for privacy or withstand regulatory scrutiny. Publishers also have expressed concern about UID 2.0, but for different reasons, such as protecting their first-party data about web visitors. However, there are signs that those concerns are being addressed. The Washington Post in December became the first publisher to adopt UID 2.0 on its website, citing the ability to control its first-party data. Amid consumer concerns about privacy, first-party data have been heralded by publishers as a valuable resource in their monetization efforts. Google's Temkin agrees that first-party data are a building block of a more sustainable internet. He said the company is committed to cultivating those direct relationships between publishers and consumers. "We'll deepen our support for solutions that build on these direct relationships between consumers and the brands and publishers they engage with," he said. Publishers have reason to be skeptical of Google, considering its dominance in digital advertising and the software that buyers and sellers of digital media use. The company is a target of several antitrust investigations that many publishers support. However, the third-party cookie isn't coming back amid consumer concerns about privacy, compelling publishers to continue to innovate on a solution to maximize their value to advertisers"... In a related development, AT&T advertising platform Xandr announced that it will enable “agnostic interoperability” for identifiers to address the phase-out of cookies, including UID 2.0.
OTHER NEWS OF NOTE:
Kroger Beats Q4 Estimates
Grocery Dive: "Kroger reported Q4 identical sales growth of 10.6% and a loss of 10 cents per share, according to a release. The company’s digital sales for the quarter rose 118%, ahead of its full-year growth rate. The grocer reported a profit loss for the quarter due to a $989M pretax charge for commitments to the UFCW pension fund. Identical sales for fiscal 2020 increased 14.1%, while digital sales grew 116%. Full-year operating profit totaled $2.8B. For fiscal 2021, Kroger expects identical sales will decline 3-5% on a YoY basis but will increase between 9.1% and 11.1% on a two-year basis. It expects operating profits to grow at a compounded annual rate of between 5.4% and 8.5%"...
Walmart Pledges More Support for Made-in-USA Products
WaPo: "Walmart plans to invest $350B in products made, grown or assembled in the United States over the next 10 years, a move it says will help create 750,000 jobs. The world’s largest retailer said Wednesday it is committing to source a wide range of American-made products, including textiles, plastics, small electrical appliances, food processing, and pharmaceutical and medical supplies. The announcement follows a similar commitment from 2013, when it said it would invest $250 billion in products made (or grown or assembled) domestically. That effort later came under scrutiny after consumer advocacy groups reported what they called misleading labels on Walmart.com to the Federal Trade Commission. “U.S. manufacturing really matters,” said John Furner, CEO of Walmart U.S. “More businesses are choosing to establish their manufacturing operations in the United States, and the result is more jobs for Americans — a lot more jobs""...
Amazon Opens First Non-U.S. Fresh Store, in London
NY Post: Amazon has opened its first non-U.S. cashierless Amazon Fresh store, in London. Amazon opened the doors to its Amazon Fresh shop in West London’s Ealing neighborhood on Thursday, in what it said will be the first in a wave of shops in the British capital using its automated checkout technology. Amazon already operates 26 cashier-free convenience stores in the US under the Amazon Go brand and two larger supermarkets called Amazon Go Grocery. As part of its U.K. launch, Amazon also unveiled its new private label food brand, by Amazon"...
Amazon Snaps Up NY-Area Warehouses During Pandemic
NY Times: "The abrupt shift in shopping patterns has made New York a high-stakes testing ground for urban deliveries... Amazon has spent the pandemic embarking on a warehouse shopping spree in New York, significantly expanding its footprint in the biggest and most lucrative market in the country. It has snatched up at least nine new warehouses in the city, including a 1M-plus square foot behemoth rising in Queens that will be its largest in New York, and today has at least 12 warehouses in the five boroughs. And it has added to its roster more than two dozen warehouses in suburbs surrounding the city. No other large competitor has a single warehouse in the city and Amazon has largely left most of its chief rivals, like Walmart and Target, behind"...
Retailers: Lifting Mask Mandates Is Premature, Dangerous
RetailWire: Texas governor Greg Abbott's decision to lift the state's mask mandate "took many by surprise, considering that Texas remains among the hardest hit states when it comes to the novel coronavirus pandemic and fresh concerns are being raised about four different variants, including those considered more easily spread, that have been discovered in the state by medical researchers. Retailers have long enjoyed the hands-off approach that Texas takes to business, but this latest action has many wondering if Mr. Abbott and backers of his action have fully considered the situation it puts retail operators in. Many have had to deal with a substantial part of the population who have chosen to disregard the science when it comes to COVID-19, including those who still cling to theories that it is no more deadly than the flu or, worse, that it’s a hoax made up by Democrats and their allies. “Tremendous strides have been made in recent weeks lowering the rate of COVID-19 infections and vaccinating seniors and other vulnerable populations, and President Biden’s announcement yesterday that every adult will have access to a vaccine by the end of May is great news,” Jason Brewer, EVP, communications and state affairs, Retail Industry Leaders Association, said in a statement responding to the lifting of mask mandates. “We should not jeopardize this progress with a premature victory celebration.” Bill Thorne, SVP of communications and public affairs at the National Retail Federation, said retailers have the right to determine and enforce their own policies, including banning customers without masks from entering stores. In July, NRF called on retailers nationwide to establish and enforce mask mandates. Texas is not the only state that has recently lifted mask mandates. Iowa, Mississippi and Montana also no longer require masks in public places. South Dakota has never implemented a mask mandate despite having one of the worst records when it comes to per capita spread of the disease, associated hospitalizations and deaths." USA Today: Mississippi, as well as Texas, is lifting mask mandates and dropping business occupancy limits. "While Texas and Mississippi plan to lift their mask mandates, Kroger said Wednesday it will continue to require both customers and employees to wear face coverings amid the ongoing COVID-19 pandemic. "The Kroger family of companies will continue to require everyone in our stores across the country to wear masks until all our frontline grocery associates can receive the COVID-19 vaccine," the Cincinnati-based company said in a statement. The declaration carries some serious weight: Kroger is the nation's largest supermarket chain and the third-largest retailer in the world. Besides Kroger stores, the grocer operates regional supermarket chains in 35 states [and] has nearly 2,800 stores. Kroger said its decision was based on its "urgent priority" to provide "a safe environment for our associates and customers while meeting our societal obligation to provide open stores" and ensure "our communities have access to fresh food." The retailer said it also continues to advocate for its frontline workers are a priority in states' vaccination plans. The company also said it encourages customers and employees to practice social distancing and frequent hand washing as recommended by federal health officials"...
OTHER NEWS OF NOTE: