COSTCO GETS GLOSSY; BIG DISCOUNTER NEAR DEAL TO SELL MAGAZINES FOR FIRST TIME
FAJARDO, Puerto Rico – Costco is said to be close to a deal to begin selling magazines at its warehouse stores across the United States, according to several sources here for the annual American Magazine Conference.
Negotiations have been under way for more than a year, and there is still a chance that they could fall apart.
But one knowledgeable source told Media Ink, “I think they are very close, that they want to do it sooner rather than later.”
Right now, Costco sells no magazines at its U.S. stores although it has been testing magazine sales in Canada, offering 40 titles.
The deal now being discussed would put magazines inside the 340 warehouse outlets in the United States, available to the 45.3 million Costco cardholders.
The move would be a welcome relief to the magazine industry, which has seen newsstand sales decline for years and recently has come under scrutiny from the feds, who are looking at circulation practices as part of an ongoing criminal probe.
Currently, 18 percent of all single-copy sales are generated by the Wal-Mart chain, making it the single largest retail channel for magazines.
Another 10 to 13 percent are said to be going through the Barnes & Noble book chain.
“This will be the first major new channel that has been added in years,” said one source with knowledge of the talks.
Costco is looking for ways to get its regular customers into its stores more frequently.
One source said an earlier proposal had fallen apart over price, since magazines did not want to foot too big a tab for the rack space.
Jim Klauer, the vice president of general merchandising at Costco who is spearheading the project, could not be reached.
Deanne Witt, Costco’s assistant general manager of media and merchandising, said selling magazines was something the company was “looking at” and declined further comment.
But one source said that an announcement could come as early as this week.
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Don’t expect to see the Martha Stewart name on a toilet bowl cleaner or a new car.
But it seems like everything else is fair game as Martha Stewart was back front and center after spending five months in jail earlier in the year for lying to the feds.
“I’m still here,” she said as she took center stage with the company CEO Susan Lyne.
Mel Karmazin, the CEO of Sirius Satellite Radio, said he would be writing checks in 2006 to Martha Stewart Living Omnimedia for the new Martha Stewart satellite radio channel.
He said he’d also be writing one to Hearst for the Cosmopolitan channel based on the magazine.
Martha’s new business advice book, “Martha Rules,” just hit from Rodale. And of course there are the ratings-challenged television shows, the live syndicated daily show and “The Apprentice” spinoff on NBC.
“It is clear it launched to lower numbers than NBC expected but since it moved to 9 p.m., its numbers have been going up each week,” Lyne said of “The Apprentice” show.
She said that show was “always conceived as a one shot. Once we started doing the daytime show, we know it was impossible to do ‘The Apprentice.'”
She said the syndicated show, which is shot before a live audience, has had about 10 percent lower viewership than she hoped.
Evan Smith, the editor of Texas Monthly, gently asked if there might be too much Martha out there these days.
“Do you have too much of Barnard College or Harvard?” said Martha. “We are teachers and that’s what we do with everything. That’s what it is about. I don’t know if you can have too much of that.”
She only fielded one question about her five-month incarceration.
“The people were for the most part nice, but you would not want to be there. It does not encourage personal growth. It is not a good thing.”
She said she was paid 12 cents an hour. “It took me 650 hours just to be able to buy a pair of boots. It’s pitiful.”
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Mary Berner, the president of the Fairchild Publications unit of Condé Nast, was here briefly but had to hurry back.
Now we know why. Yesterday, she gave the old heave-ho to Jane Publisher Mark Oltarsh.
He had joined from Maxim in March when founder and editor-in-chief Jane Pratt was still on the scene.
Oltarsh could not be reached for comment.
A number of major advertisers have apparently been staying away in recent months to ascertain the magazine’s direction under new editor Brandon Holley.
Ad pages were said to be off about 40 percent in the November issue compared to a year ago.
Holley is planning a major redesign in March and the company clearly wants to land a new publisher to begin taking the message about a new Jane to advertisers at a crucial time.
To help with the redesign, Holley just hired Paul Ritter, who had been the art director on the recently closed Vitals to be the new design director.
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Don Logan, the head of the media and entertainment group at Time Warner, was back for an address to his old charges.
He said there is plenty of fight left in the magazine industry and that he expected the future to be even more profitable than the past.
“We’ve increased profit 13 out of 14 years and [Time Inc. CEO] Ann Moore just told us we’re going to do it again in 2005 – right, Ann?” he said. “Well, maybe she didn’t just tell me that, but first thing when she gets back to New York.”
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The big winners in the El Conquistador casino on Monday night: Matt Cooper, the Time magazine political correspondent, who reportedly walked away with several hundred dollars, and Playboy CEO Christie Hefner, who won $350 in blackjack.
Laurel Touby, the Mediabistro editrix, also hit it big, snagging $650 at blackjack.
But she was wagering a stake put up initially by Men’s Health Editor in Chief Dave Zinczenko.
kkelly@nypost.com
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