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NEW YORK — As some magazine executives have learned the hard way and others have discovered to their delight, Wal-Mart has the power to bruise or build a book on whim. But these same executives are receiving increasingly mixed signals from the sprawling retail giant on how it intends to use its power going forward.

The Wal-Mart executives who made the decision to ban the lad magazines, Maxim, Stuff and FHM, and place blinders on several top-selling women’s titles are not the same executives who are providing Time Inc. with input on a mass market women’s magazine the company is developing, several circulation executives said. Nor are they the ones who chose to breathe life into a startup named American Magazine, which had had no luck finding distributors until Wal-Mart volunteered to carry it in several hundred stores.

This story first appeared in the July 18, 2003 issue of WWD.  Subscribe Today.

The company also has apparently abandoned an ambitious plan introduced in early 2002 to reform the magazine industry’s entire distribution chain — a plan in which the main beneficiary, the circulators said, was Wal-Mart itself. Nearly one out of every eight magazines sold on the newsstand are sold at Wal-Mart, and with that leverage in hand, the company held discussions with the major publishers about a distribution system that would have paid magazine wholesalers flat fees instead of commissions, and recorded retail sales using scanners at the checkout counter.

Wal-Mart borrowed these ideas from a similar plan by Time Inc. and Time Distribution Services. But Wal-Mart would have used the data generated by scanners in its stores to play favorites among publishers by providing the top sellers with the best wholesale rates and sales data for entire categories like beauty and automotive, according to several circulation executives.

But even though the company has felt comfortable issuing ultimatums to Dennis Publishing, Emap plc, Hearst Magazines and Condé Nast because of their magazines’ cover lines and overall content, Wal-Mart has apparently backed off its grand distribution plan.

“I’ve heard that even Time has walked away [from its own plan],” said one top circulator. “That’s DOA.” He added, “The decision on whether to cover up or throw out a magazine is made at a higher level than the magazine buyers….It’s probably being made in a whole other area of the company. The buyers would not have wanted to see hundreds of millions of dollars worth of sales being covered up.”

Time Inc. declined comment on the state of its own plan. A Wal-Mart spokeswoman said, “We are always looking to improve distribution of our products. That’s an ongoing process.”

In the meantime, even publishers who aren’t on Wal-Mart’s list of blinded titles — which currently includes Cosmopolitan, Marie Claire, Redbook and Glamour — are wondering how the plastic blinders will affect sales when they appear in checkout lanes in the middle of next month. With the coverlines that catch readers’ eyes having been obscured due to customer complaints of indecency, circulators are in the dark on just how much appeal the logo and cover subject have by themselves. A representation of the blinders, based on the descriptions of several circulators who have seen drawings, appears at left.

“Obviously, testing coverlines is a big thing for these magazines. We don’t test an issue without them,” said another circulation executive, whose magazines are not affected. “We’ll see if it has an impact. I think it will. I think it will create a visual to the consumer, who will walk right by. And that hurts both us and Wal-Mart.”

But Wal-Mart might now be in the business of grooming new magazines to take the place of ones its readers find offensive. As first reported by the New York Post, Time Inc. has sought the advice of Wal-Mart executives in the development of a mass market women’s magazine. It is unclear how far along those plans are, but Time Inc. execs have already made several trips to Wal-Mart headquarters in Bentonville, Ark., for consultations, a source inside Time Inc. said.

Wal-Mart also single-handedly turned the Memphis-based American Magazine from a fledgling startup into a nationally distributed magazine after 29-year-old founder Mignonne Wright parlayed a three-minute phone pitch last fall to the company’s magazine buyer into a meeting in Bentonville the next day. After the meeting, the buyer agreed on the spot to distribute the title, and two test issues of American appeared in 700 Wal-Marts by Christmas.

The premiere issue is on newsstands right now — at Wal-Mart and elsewhere, thanks to the retailer’s clout. Wright, who describes her magazine as a modern day Saturday Evening Post, said “Curtis is our distributor now, and in our opinion, we would have gotten into Wal-Mart through them or through Anderson News [a leading wholesaler]. We didn’t have to pitch to them. We went directly to Wal-Mart to pitch it.

“As far as we’re concerned, if you have a public in mind and it makes sense that a Wal-Mart customer would want it, it’s common sense to talk to them,” she added. “I think it’s a smart move on Time Inc.’s part, and if anybody else can do it, it’s a great idea for them, too.”

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