William T Kerr: Comeback Award
Meredith flourishes with Kerr at helm
For more than two years, publishing-related companies and others that rely on advertising spending for revenue have been suffering through the worst slump since the Great Depression.
Despite the conditions, Meredith Corp., under Chairman and Chief Executive William T. Kerr, has invested in a variety of new products and spent money to expand its reach to younger readers. While Meredith was initially stung by the advertising recession along with its competitors, its recent moves now appear to be making a difference.
Wall Street analysts expect the company to report profits of 38 cents per share for the company’s fiscal second quarter, which ended Dec. 31. The company earned less than half that – 17 cents a share – during the same period a year ago.
Investors have noticed. While the Standard & Poor’s 500 index has dropped 21 percent in the past year, shares of Meredith have risen 15 percent.
“What we’ve done has paid off very well for us amid this terrible advertising downturn,” Kerr said.
The company has recently completed a redesign of its flagship magazine, Better Homes and Gardens – the first time it has been changed in a decade. The magazine’s market share of advertising has grown to 29.2 percent from 28 percent. Traditional Home and Country Home, two of its mid-sized titles, have also posted gains.
Revenues at Meredith’s 11 television stations, which account for about a quarter of the company’s total, rose 27 percent in its fiscal first quarter, higher than the industry average. Seven of the ten markets where its stations broadcast increased the number of viewers who watch their programming. The company owns two television stations in Portland, Ore., an arrangement it made in 2002.
Last November, the company announced plans to spend $115 million for American Baby Group from Primedia Inc., its biggest acquisition outside of broadcasting in more than 15 years. The purchase promises to give the company access younger readers, plus Spanish-language titles that will boost its presence among Hispanics.
Meredith has changed leadership of its sales force at both Ladies’ Home Journal and Better Homes and Gardens, its two top-selling magazines. It is expanding the amount of custom publishing work it does and it is forging new relationships with retailers to boost sales.
Under Publishing Group President Steven Lacy, the company has teamed with Rochester, New York-based grocer Wegmans and is expanding the amount of custom publishing it does.
Meredith recently won a contract to publish three magazines for DaimlerChrysler AG’s Dodge, Jeep and Chrysler brands, beating rival Hearst Corp. Already, Meredith has published more than six million copies of the magazines. It won a similar agreement for Schering-Plough Corp.’s popular allergy drug Clarinex.
The company, which is currently celebrating its 100th anniversary, has also spent much of the past year giving back to the communities where it operates. Partnering with Rebuilding Together, which helps the elderly, handicapped and families with young children improve their homes so they are safe to live, a majority of Meredith’s 3,000 employees fanned out to help revamp 39 homes in 12 cities on different days in October. In Des Moines, Meredith workers refurbished more than two dozen homes.
Meredith has recently increased its relationship with Drake University and will offer as many as 7 students year-long paid apprenticeships. The new program, an extension of a longstanding partnership between Meredith and the private university, promises to give Meredith access to talented new workers while helping Drake, a small school, compete against journalism powerhouses such as the University of Missouri, Columbia University and Northwestern University.
Late last year, Meredith installed a $1 million sculpture called “Plantoir” on its campus.
“Look at the decisions they’re making and the amount of investment they’re putting here,” said Michael Blouin, the former chief executive of the Greater Des Moines Partnership and incoming director of the state’s Department of Economic Development.
For these reasons, the staff of the Business Record and its readers chose Kerr as the recipient of this year’s Comeback Award. The award is designed to single out a company that has made significant strides in turning its fortunes around, while at the same time demonstrating a high level of commitment to Central Iowa.