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NEW YORK — As Kevin Costner said in “Field of Dreams,” “This isn’t Heaven; it’s Iowa.”

Meredith Corp. executives might have been chanting the same mantra earlier this week, as the company’s publishing division delivered double-digit growth despite one of the industry’s worst doldrums in years. Among media cognoscenti, Meredith is best known (when it’s known at all) for publishing Better Homes & Gardens and being based somewhere in Iowa (in Des Moines, actually). And that’s just fine with Meredith execs, who are busy making money and building one of the most diversified (if not exactly sexy) publishing companies around.

This story first appeared in the August 8, 2003 issue of WWD.  Subscribe Today.

BHG is still as big a cash machine as ever (perhaps only People generates more revenue) but chief executive officer William Kerr gave special credit on an earnings conference call Tuesday to the rejuvenated Ladies Home Journal and the over-40 hit, More, for the publishing division’s 24 percent rise in operating profits in the fourth quarter ended June 30, to $46.4 million. For fiscal 2003, the company’s publishing arm turned in a $139.3 million operating profit, rising 17 percent. And they’ll keep rising — Kerr said growth should continue in the low-double digits while margins should approach 20 percent.

But the big magazines aren’t where the real action is. New magazine group president Jack Griffin and his boss, publishing president Steven Lacy, are on the lookout for potential acquisitions to give the company a lineup of magazines covering every year in a woman’s life. BHG, LHJ and More have the late 30s and onward covered, and last year’s $115 million purchase of American Baby and its satellite properties brought in young mothers.

But there are still plenty of age groups left.

Meredith looked at Seventeen, but passed because of the intense competition (and suspect circulation file). “We need a very strong circulation model to feel comfortable with any acquisition,” Lacy said in an interview. It also made no secret of its desire for Shape when Wieder Publications was on the block last fall, but David Pecker’s American Media bought the company outright instead.

So, for now, growth will have to come from within through spinoffs, one-shots and custom publishing. At a company meeting at the Cipriani banquet hall with Meredith’s Manhattan staff a month and a half ago, executives explained that perhaps the most alluring thing about the American Baby franchise was the expansion of its Spanish-language titles, Espera; Primeros 12 Meses, and Healthy Kids en Espanol. “We see birthrate levels that show one in every four babies will be born to a Hispanic mother,” said Lacy. “We have a Hispanic consulting operation about to report to us on how we might approach that market.”

While Hearst and Condé Nast strain against Wal-Mart’s decision to place blinders on some of their titles, Meredith plays to world’s largest company’s core customers. At Home Depot, the company has even been designated the chain’s category manager for all books and periodicals, meaning it gets to choose how it displays and promotes its own products. Its custom publishing arm produces how-to books for the chain while churning out home decor-themed one-shots under the BHG banner that fill the racks in checkout aisles.

And Meredith can use the help. Despite its financial success, newsstand sales remain Meredith’s weakness, and were the only downbeat note on the earnings call, where Lacy admitted that “newsstand revenue is down compared to what we expected it would have been, and compared to the prior year, as is [newsstand] profitability.” The company is actively shying away from the newsstand now — none of the American Baby titles can be found there, and More is almost nonexistent.

Which is why it’s heavily investing in alternate channels (pediatricians’ offices, in the case of American Baby) and direct mail. More plans to raise its rate base to 1 million in September 2004 from 850,000 now, reaching what publisher Carol Campbell said is “the magic number” for landing more automotive advertising to go with the Volvo business she’s just broken. Also, Coty and Revlon are in the book for the first time.

More was the last big hit of retired Meredith editorial director Myrna Blyth, whose other responsibility, LHJ, has been redesigned and relaunched under new editor Diane Salvatore and publisher Lynn Lehmkuhl. Thanks in part to Martha Stewart’s legal fallout and the still-surging cultural nesting urge, LHJ has a real chance to matter to readers and advertisers alike again. Thanks to new beauty director Patricia Reynoso (poached this spring from WWD’s sister magazine, W), Lehmkuhl said she’s receiving requests for proposals from beauty advertisers that left her off the list last year.

“It really makes our story more authentic, now that we have someone more respected and more knowledgeable here.”

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