A blog on issues affecting Australia's newsagents, media and small business generally. More ...

Author: Mark Fletcher

Bauer closes NZ magazine business permanently

NZ Herald reports that Bauer has closed its NZ magazine business permanently.

New Zealand’s biggest newstand magazines have been folded, as Bauer Media NZ abruptly closes its doors permanently as a result of the Covid 19 crisis.

The New Zealand wing of the German-owned company publishes a range of New Zealand magazines including Woman’s Day, New Zealand Woman’s Weekly, The Australian Women’s Weekly, the Listener, North & South, Next, Metro, Kia Ora, Home NZ and Your Home & Garden.

The closure brings to an end many decades of publishing in New Zealand, with around 300 staff out of jobs.

A staffer spoken to by the Herald said they were “devastated” and “didn’t see it coming”.

This move is a shock.

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magazines

Sing Tao newspaper closure costs newsagents

Newsagents have lost out from the unexpected collapse a few weeks ago of Sing Tao Newspapers Pty Ltd. Despite this, the liquidator is pursuing newsagents for what could be dubious amounts. Further, they are being heavy handed in their approach.

Newsagents were supplied newspapers by the company. Newsagents paid for newspapers. Then, later in the cycle, they claimed for unsold product. Who knows what the actual debt is given the surprise collapse of the company. Timing is key in determining an accurate position.

The liquidator is threatening legal action to recover what they claim is a few hundred dollars owed in one instance shown to me. I doubt a liquidator would take legal action to recover this.  However, I am no expert and offer no advice.

If I received such a notice, I’d show the liquidator an invoice for my costs from the collapse covering any uncredited returns.

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Ethics

News Corp. to suspend print editions of 60 community papers

Nine has this story:

Rupert Murdoch’s News Corp will suspend publication of 60 community newspapers including The Manly Daily, The Wentworth Courier and The Diamond Valley Leader due to the COVID-19 pandemic.

The company announced on Wednesday morning it would turn its 60 community newspaper mastheads to digital-only products and suspend print publication from April 9 due to rapid declines in advertising revenues.

It’s understandable. Ad revenue has all but disappeared. The question is, will they come back?

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Media disruption

Nine suspend some sections of print newspapers

Mumbrella has this story:

In light of the coronavirus (COVID-19) outbreak, Nine has pivoted its publishing arm. The changes include the suspension of some print sections and the optimisation of newspapers’ webpages to provide consumers with COVID-19 updates.

Non-weekly magazines have been suspended and some lift outs have ceased. The staff impacted by the changes will be redeployed as appropriate, said a Nine spokesperson.

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Media disruption

NZ government closes non daily newspapers

Kiwi blog has this story:

Govt closes down all non daily newspapers

The Government announced:

  • The current focus for government and all New Zealanders must be on minimising the movement of people to stop the transmission of Covid-19

  • In relation to news and  this applies both to the movement of staff of  organisations and their supply and distribution lines

  • The focus for news and media as an essential service has to be on the provision of timely news and current affairs

  • Daily newspapers are currently included in the definition and are expected to take strong measures to ensure safety of staff and the public; combined with their digital reach, they remain essential at this stage for the timely dissemination of news to the majority of New Zealanders

  • Printed periodical and non-daily publications are not considered essential under the news and media designation

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Media disruption

Ovato seeks help from banks

This story The Australian just now:

Printer Ovato cuts pay by 40pc, seeks bank aid

Australia’s largest printing company, Ovato, is seeking help from its banks amid the coronavirus crisis and will slash pay by 40 per cent for most of its staff, including all executives and board members.

Ovato, previously known as PMP Group, said ANZ and Assetsecure have agreed to waive the testing of financial covenant ratios.

It is also working to secure “similar waivers and covenant relief from noteholders” of the $40m secured subordinated notes due in November 2022.

Chief executive Kevin Slaven said the company is working to ensure its expenses match its revenue during the economic uncertainty.

“While this uncertainty continues, Ovato remains confident in its ability to maintain our service standards with plants operating in all Australian states, albeit at reduced capacity,” Mr Slaven said in a statement released late on Tuesday night.

Chairman Michael Hannan said the group is facing the “unprecedented crisis with the most experienced management team in the industry”.

“We have acted early and are adapting to the daily changes. We have managed capacity by shutting down equipment at all sites, while retaining the flexibility required to ramp up or down quickly.

“I am proud to say that we have had good co-operation from our entire workforce, which will see an effective 40 per cent pay reduction for most of our staff, including all executives and board members,” Mr Hannan said.

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magazines

State governments support small businesses

Newsagency marketing group newsXpress, of which I am a Director, in its daily support email to members, included this list of financial support from state and territory governments, which you may find useful:

State government support packages.
Here are links to state / territory government support packages announced to help businesses through the COVID-19 situation. While each state has different rules, some will allow the packages to be used for useful things such as website development and other activities that support the operation of the business. Please click on the appropriate link for your location and read up what you may be able to tap into. The text for each state is from the government websites.

  1. Victoria. $10,000 grant that could be used for business improvement including web development or similar.
  2. ACT: Earlier in the month, the government released a recovery plan, including a $20 million business improvement scheme. Under the scheme, businesses will be eligible for grants of $10,000 for improving business premises. This can include new equipment, new fit-outs and physical changes to attract customers. It is not currently clear what is required for eligibility. If they can also contribute $10,000 of their own, they will receive an additional $10,000, for a total of $30,000 funding.
  3. NT: $20 million All Territory businesses will be able to access a $10,000 grant, followed by an additional $10,000 grant if they contribute $10,000 of their own.
  4. Western Australia: No grants as such, other than the Lotterywest announcement from Monday. However: The WA Government will waive rental payments for small businesses and not-for-profit groups in State Government-owned buildings for six months. One-off $2,500 credit on electricity bills for small businesses that consume less than 50MWh per annum.
  5. Queensland. Nothing substantial for small business here.
  6. Tasmania. Several grants available, somewhat limited in scope and subject to eligibility.
  7. New South Wales. Several options available, somewhat limited in scope and subject to eligibility.
  8. South Australia. Nothing specific yet.

Our advice is that you carefully read the information for your location and that you then apply for every thing you could possibly be eligible for.

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Newsagency management

Pandemic selling out

Yeah, I know it’s April 1, but seriously, Pandemic, the game, is selling out. It’s been a hit. We jumped on a couple of months ago and are grateful for the insider supplier tip.

Pandemic is another early adopter move that has provided some welcome sunshine in an otherwise challenging time for retail.

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Opportunistic retail

ACCO to open direct accounts with newsagents

A news release just now from ACCO.

NOTIFICATION TO NEWSAGENTS 

With the continuous changing landscape of our market, external conditions and the need to better service the newsagent channel, we are pleased to advise that effective April 1st 2020 a new team of ACCO Representatives across Australia will be calling directly on newsagents in each state. 

This exciting new venture doesn’t change our relationship with the Newsagent Wholesalers or Buying Groups, this simply gives you a more direct voice and relationship with ACCO Brands. We will assist you in merchandising, improving store layouts, showcasing new products and providing you with an opportunity to purchase our marketing leading brands including Marbig, Artline, Spirax, Colourhide, Stabilo, Maped, Cumberland to name a few. 

Effective 1st April, 2020 all Newsagents can open a direct account with ACCO Brands Australia subject to ACCO Brands General Terms and Conditions of Sale. This includes the option of 30 day payment terms and $550.00 (ex GST) Minimum Order Value. Alternatively, you now have the option of paying via credit card at the time of order placement and be entitled to a reduced Minimum Order Value of only $250.00 (ex GST). The payment via credit card, at the time of order placement will waive the surcharge for ordering under $550.00 (ex GST) – Note surcharge will still apply if the order value is less than $250.00 (ex GST). This facility is only available when you order via our website (accobrands.com.au). 

As we work together in these unprecedented times, we are pleased to offer you this improved service and continue to provide you with market leading brands, strong products and great customer service. 

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Newsagency management

Lotterywest to pay every Lotterywest retailer $30,000

Lotterywest sent this email to their retailers today:

Today we are announcing a $17.5 million COVID-19 Retailer Incentive Package to assist Lotterywest retailers during this very difficult time.

The package includes $30,000 for each Lotterywest retailer, which will be paid in three $10,000 monthly instalments, starting from Wednesday 8 April 2020. We will also suspend terminal and service fees for every store for six months.

Premier Mark McGowan and Lotterywest have also established a $159 million COVID-19 Relief Fund to provide support to organisations that are helping people experiencing hardship, announced by the Premier earlier today. Read the full media statement here.

Lotterywest responds to COVID-19

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Here is a list of Questions and Answers we’ve put together about the package.

You can also access all the information on the Retail Link website.

We’ll continue to keep you updated. In the meantime, please direct your questions to your Retail Relationships Officer, or contact our Customer Services team on 133 777.

Thank you and please take care.

Kind regards

Susan Hunt PSM
CEO Lotterywest and Healthway

———

What an extraordinary move for WA newsagents and lottery retailers. I know from calls already tonight that this announcement has delivered extraordinary personal relief in addition to the money that will flow.

Kudos to Susan Hunt and the Lotterywest board and to Premier Mark McGowan for delivering on his election promise to Lotterywest retailers.

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Leadership

How the government’s inaction on retail tenancy in this COVID-19 world is problematic for small business retailers

The Prime Minister late yesterday asked business owners and landlords to sit down and work with each other to find a solution to the retail tenancy challenge presented by the restrictions imposed in government responses to COVID-19.

Based on my work with retailers in many situations, city, country, high street and mall, the approach of sitting with landlords will not work for most.

While some individual landlords have already delivered practical help with rent holidays and rent discounts, too many have not. In the shopping mall situation, I am not aware of any of the major landlords like Westfield offering any financial support. Indeed, in my now experience with Westfield, their approach has been quite threatening – don’t close, pay your rent on time.

At the independent landlord point, I have seen discounts as high 75% for six months put in place, April / May rent free in a couple of situations. The most common discount I have seen is 50% off for April with a commitment to reassess.

My experience is that independent landlords are more likely to act sooner and at a more valuable level.

This is where the Prime Minister’s announced approach is problematic as it relies on too much work to be done, too many conversations to be had. Big landlords like Westfield operate in silos, they treat each tenant differently with independent small business retailers usually be treated worse than big retailers.

What we need is national consistency. We need this urgently. We need the federal government to set a position, urgently, that all – retailers and landlords – can rem;y on as a single national position. Without this. the weak will carry the higher per square meter cost, as is the case today.

I urge the Prime Minister and others in authority to resolve this nationally for the benefit of the mental and financial health of small business retailers.

We have been hearing about something coming for two weeks. With each day that passes with no decision, the perspective and health of those so desperately waiting deteriorates and this is problematic for their businesses and those who rely own their businesses.

We can’t trust the Westfields of the world to fix this. They have no track record in this regard. This is something the federal government needs to address, and urgently.

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retail

News Corp. removes paywall for 28 days

In a move that it says is designed to help the community, News Corp. has removed the paywall for its mastheads for the next 28 days. I wonder if the move is more about getting more people to taste their wares before they offer a sweet post-corona deal to stay inside a paywall. Or, maybe, it is about broadening the reach of their mainly ignorant opinion writers who yell nonsense daily. Or, maybe, it is neither and purely innocent.

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Social responsibility

Online Powerball $80M winner helps Tabcorp and not retailers

The winning ticket in Thursday’s Powerball $80M draw was purchased online. Given the usual rush to the retailer of the winning ticket, online purchases will increase.

While Tabcorp cannot control the purchase location of the winning ticket, they can control the level of support for their physical retail network. My view is that it is grossly inadequate, as it has been for years.

Their focus is on compliance and not proactive support and encouragement. The margin paid to retailers is also inadequate. Retailers stick with it out of fear for what business might look like without it and in the hope that Tabcorp will behave better.

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Lotteries

Older customers more likely to disrespect social distancing requirements of Coronavirus response

Older customers, 70+, male and female, are the cohort most likely to ignore social distancing requirements laid out by government in their coronavirus response according to retailers.

Older customers are more likely to shop in groups, cluster with too many in a limited space, touch others in the business, want to stand still for a talk and mock moves being taken by the government to flatten the coronavirus infection curve.

I have been hearing this all week from newsagents and other retailers across the country in one on one conversations and in video conferences with groups of retailers. Retailers are frustrated, and they feel helpless to fix the problem.

One retailer talked about two grandparents coming into a small shop with two grandkids.

Another told me about an old customer who reached across the counter and patted a staff member on their arm saying it’s nothing to worry about.

Another retailer tells of two older male shoppers saying that social distancing is for sissys.

Plenty said that in their experience the older customers are less like to take the coronavirus risk seriously.

With my newsXpress group we have a daily video conference meeting and with my Tower Systems POS software retailer business customers we have a video conference every few days. It is these coronavirus related meetings to discuss business conditions and encourage each other where I have heard about the problem withholder shoppers.

How some older people are behaving is a challenge for all retailers and those who work in retail. While not the same as the health workers helping those with this illness, those who work in retail face a considerable challenge every day with their safety very much in the hands of customers and their behaviour.

Retailers are protecting employees with gloves, hand sanitiser and good, safe, practices. They have floor and other markings to guide social distancing. Some I know are installing perspex partitions to create a better distance between staff and customers to reduce the opportunity for droplets to pass.

The challenge remains how to deal with older customers as they represent the cohort causing the most difficulties. 

I think our communication needs to be clear and consistent – at the front of the store, in-store and on social media. we need to be vigilant at front of store, controlling shop entry and being firm to stop people if they present a risk because of the number in the group or because of their behaviour. We need to be prepared to ask people to leave if their in-store behaviour is inappropriate.

I appreciate some here may say this is overkill. Of course, I disagree. These are unique and challenging times. We need to provide a safe workplace for all who work in our businesses and for those who shop with us. Anyone who puts this at risk needs to leave the business.

Here is a message I put on social media this morning to address this issue:

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Social responsibility

Advice for retail businesses designated essential

Here are some tips for your consideration should your retail business be designated an essential business in the looming lockdown. We hope they are useful:

At some point, retailers around you will be shut down for a time. If you are designated essential, the move will see affected retailers possibly upset at your favoured treatment for the newsagency channel, upset at you that you are open.

Your focus needs to be on how to adjust your business to the changing conditions. That does not mean going all out to rake in as much cash as possible. Rather, our advice is that you modestly adjust the business to serve the needs of locals. Those shop permitted to remain open could serve broader needs through this time

Look around and plan now for modest moves you could make to broaden the appeal of the business. Our advice is that you focus on categories you are already in – but with an expanded range, or products that fit with categories you already serve today.

We think stores remaining open need to make significant shop floor moves, to reflect the needs of the tougher circumstances and to demonstrate your respect for these as well as the wellbeing of shoppers and your team.

  1. Change your shop to look different. You are moving from open and competitive retail to special circumstance retail, essential service retail – there is a big difference. Making your shop look fundamentally different is very important.
  2. Create more space for shoppers to move around safely. Consider policing at the door how many enter.
  3. If appropriate, consider and entrance and an exit.
  4. Move destination products to the front of the shop.
  5. Pitch popular products at the counter. 
  6. Reset the counter. De-clutter. Keep essentials there. Have a thoughtfully selected range of impulse items. but, again, do not clutter the counter.
  7. Cashless. We urge you to encourage customers to pay by a card.  Click here for advice on how to safely remove hand gloves.
  8. Staff safety. We urge you to provide staff with gloves and the request they are changed every hour and that the outside of the gloves are regularly hand sanitised.
  9. Make the counter safer. Consider installing a perspex counter to further protect.
  10. Hand sanitiser freely available.
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Social responsibility

ACCC announces it does not oppose Bauer acquisition of Pacific Magazines

Here is the ACCC press release:

Bauer Media’s proposed acquisition of Pacific Magazines not opposed

26 March 2020

The ACCC will not oppose Bauer Media’s proposed acquisition of Pacific Magazines (ASX:SWM), after deciding the transaction was not likely to substantially lessen competition in relevant markets.

Bauer Media and Pacific Magazines overlap in the publication of print and digital magazines and in content published on digital platforms.

The ACCC carefully assessed the impact of the merger, given the close competition between the parties’ key print magazines, Bauer’s Woman’s Day and Take 5, and Pacific Magazines’ New Idea and That’s Life!.

“The significant declines in the circulation and revenue experienced by many magazines are sustained, substantial and likely to continue, resulting in less investment in content and fewer retail promotions,” ACCC Chair Rod Sims said.

“We note that some magazine titles have already closed, and others are likely to follow, regardless of this deal.”

“We also note that the content offered by the four key magazine titles, including celebrity news, ‘real life’ stories, puzzles, and food, health and lifestyle tips, is all available from other sources.”

“Ultimately, we determined that although there is a notable level of competition between the particular print titles, the transaction was not likely to substantially lessen competition because publishers in other media, particularly online publishers, will increasingly compete with Bauer,” Mr Sims said.

The ACCC found that while many of Bauer and Pacific Magazines’ customers value the tactile nature of physical magazines, they are often not regular buyers of the magazines. Further, increasingly others see online content as a ready alternative, and this should constrain Bauer’s ability to raise prices or reduce investment on content.

Further information is available at Bauer Media Pty Limited – Pacific Magazines Pty Ltd.

Background

The ACCC commenced a review of the proposed acquisition on 23 October 2019 and raised concerns about the acquisition in December.

Bauer Media and Pacific Magazines are publishers of magazines and digital content.

Bauer Media is part of the Bauer Media Group, which is based in Hamburg, Germany. Bauer Media group is a privately owned international media company publishing over 600 magazine titles globally.

Pacific Magazines is a wholly-owned subsidiary of ASX-listed Seven West Media Limited (SWM). SWM is a national media provider across television, magazine and newspaper publishing and online platforms.

ASX-listed Seven Group Holdings Limited (SGH) has a 41 per cent shareholding in SWM. SGH is an Australian diversified operating and investment group with businesses and investments across industrial services, oil and gas and media.

Bauer and Pacific Magazines overlap in the publication of titles in:

  • the category referred to as “Women’s interest” in industry documents (Bauer with Woman’s Day, The Australian Women’s Weekly and It’s Your Day, and Pacific Magazines with New Idea and New Idea Royals); and
  • the Real Life category (Bauer with Take 5 and Take 5 Monthly, and Pacific Magazines with That’s Life! And That’s Life! Monthly).

The parties also overlap across other categories of magazines including Home & Garden, Celebrity, Fashion & Lifestyle, Health & Fitness, Puzzles, Food and Parenting.

Release number:
47/20
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magazines

A terrific surge in newspaper home delivery

Across the country, but more so regionally and in the city, people are reaching out to newsagents to open newspaper home delivery accounts.

In retail newsagencies, newspapers are being moved from the back of the shop to the front, where they were located for decades.

Everything old is new again.

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Newspapers

COSBOA calls on landlords to be fair in this COVID-19 world

Small land lords time to shine

COSBOA has profoundly congratulated those small landlords around the country who have already cut their rent or in some cases stopped rent for businesses who have no income due to the COVID-19 crisis. We call upon all the small landlords around the country to do what they can for others in distress.

Peter Strong, CEO of COSBOA, stated ‘small landlords are often small business people or families who have invested in property and have rented out to others either as commercial or as residential leases. These landlords may also be experiencing the difficulties of hard times, particularly for those whose income is inextricably linked to the property they lease, such as retired people. Yet, with the announcement from the banks that there is no need for loan repayments for small businesses borrowers for the next 6 months there is an opportunity to pass this saving onto tenants.”

COSBOA knows the pain and anguish suffered by businesses who have no income yet have rent and often wages to pay. Landlords will not benefit from bankrupted business tenants. COSBOA knows that the employees of small businesses are often valued like family and they must be considered for rent relief by residential landlords as their tenant may now be on a lower income, without a job and trying to be ‘Centrelinked’ but are having trouble due to the overwhelming of the MyGov system.

Mr Strong added “it is imperative for every small landlord with a bank loan to contact their bank and get the loan repayment holiday if they are eligible. Then immediately pass that onto their tenants.’

Mr Strong added “any small landlord who takes the loan holiday and then doesn’t pass on that saving to the tenants would be a failure as a person and as a member of our society. The biggest landlords, such as Westfields, Stocklands and the Scentre Group, have shown they are the lowest members of the big business community with their callous callow response to the needs of struggling and closing small business retailers. The small landlords will be no different if they were not to pass on the saving.”

Note for tenants: Not all landlords have loans from banks and may not receive the repayment holiday and may not be able to pass on any savings. Check with your landlord and ask if they have sought to take advantage of the bank repayment hiatus.

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Social responsibility