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No more RedPlum inserts in the paper!?


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#31
AMS

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This is a money issue, nothing else. If your local newspaper agrees to drop the price to have the RP inserted in their weekly paper, Red Plum will be back in your local paper. Valassis is hurting financially. They are losing advertisers, workers, not paying their bills, etc. They are not going to place the inserts in your local paper if it is too expensive for them. All this contacting the manufacturers voice your displeasure to the manufacturers is only going to succeed in garnering less revenue for Valassis, and less newspapers carrying Red Plum, until Valassis has to fold the FSI portion of their business. The correct entity to contact is your local paper. If your local paper is not listening, contact the owners of the newspaper. If you can convince the owners to lower their price to insert RP, you may have a chance of getting the RP back in your paper. Until (if) Valassis recovers financially, there is very little chance of seeing a RP in a paper that has been dropped otherwise.
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#32
marrelam

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The NEW YORK POST is interviewing me RIGHT NOW for a story on SATURDAY.

Edited by marrelam, 27 February 2009 - 12:06 PM.


#33
AMS

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And to further confirm it is all about the money .... (these were 2007 numbers and Valassis has had more money issues since, but they are streamlining, cutting costs and trying t survive and prosper)

Vindication at Valassis?
Advo purchase, first panned, now panning out
By Bill Shea

Wall Street wanted Alan Schultz's head.

What it got, at least for one quarter, was evidence Schultz used that head to improve his company and outwit his critics.

Schultz chairman, president and CEO of Livonia-based newspaper coupon maker Valassis Communications Inc. since 1998 surprised investors and analysts with his decision in July 2006 to acquire Advo Inc., a Connecticut-based direct-mail giant, for what ended up being $1.2 billion.

Wall Street had expected Schultz to do something since Valassis' stock and profits were sliding due to a price war with its primary competitor, News America Marketing, a New York City-based subsidiary of Rupert Murdoch's News Corp.

Analysts thought a restructuring or stock buyback loomed as Valassis saw its 2006 revenue drop 7.7 percent to $1 billion.

What investors didn't expect was the Advo deal.

Reaction was negative and swift, even more so after Valassis discovered issues with Advo's financials and sued to halt the acquisition. The companies eventually agreed to trim $125 million off the sale price and the deal was finalized in March.

A second quarter that saw Valassis' net income drop 50 percent further eviscerated its stock. In 2005, shares traded at more than $40, but by Aug. 6, the price reached a 52-week low of $7.67.

All the time, Schultz was preaching perhaps pleading patience. Give it time, he said. Adding Advo's direct-mail business those ubiquitous "Have You Seen Me?" mailers are Advo products made sense for Valassis in the long-run, he said, especially because the coupon business was mired in a price war that killed profits.

Those were his arguments. Not many were buying them.

"People were attacking Al, and he took the blows. He took a lot of punishment from investors," said Ed Atorino, managing director and media analyst for The Benchmark Co. L.L.C., based in New York. He's followed Valassis since it went public in 1992.

"I've never seen anything like it a real grilling by analysts, investors, hedge fund guys. There are a lot of people who thought, 'This guy's gotta go.' "

The second-quarter numbers may have been the nadir, Atorino said.

"That's when Al really got tremendous negative pressure from Wall Street and anyone who cared," he said. "Al really had no defense at that time, but he never wavered."

Behind-the-scenes meetings with jittery and angry institutional investors saw Schultz skillfully lay out the case for patience, Atorino said, buying him time to integrate Advo's business within Valassis' universe.

"I don't think I felt like I was done, but you feel like you're skating on thin ice at points in time," Schultz said.

Then came the third quarter.

If Wall Street was surprised by the Advo deal, it may have been equally startled to see a seismic turnaround in Valassis' numbers. Valassis (NYSE: VCI) reported revenue up 144 percent to $607 million during the quarter that ended Sept. 30. Net income was up 148 percent, from $6.6 million in the quarter a year ago to $16.4 million.

Almost all of that is attributable to Advo business. The coupons, distributed as free-standing inserts, are now less than 10 percent of Valassis' business. They used to account for 95 percent of its profits.

"(The Advo deal) was really critical for us," Schultz said. "The FSI has been great for us historically; but if you look at the price decline, it represents $200 million in lost revenue to our company. The question I ask myself today, had we not diversified: Where would we be at today?"

And while a single quarter doesn't mean all is yet well, it does provide a sense of vindication for Schultz, a former Deloitte & Touche senior accountant in Detroit before moving to Valassis in 1984.

"I certainly feel this last quarter was a little bit of vindication for us that this acquisition did make sense," Schultz said. "The problem with investors, Wall Street these days, for the most part they're short-term oriented. They don't care a whole lot for buying. We warned it would take 18 months for everything to play out after a period of adjustment. Some of our investors were not real excited about that."

Valassis' stock jumped 21 percent on the news of the third-quarter numbers, and has been hovering at $12 to $13 per share since.

Stability at Valassis is important to its clients.

"We were gratified to hear about Valassis' recent success. We have enjoyed and look forward to continuing our long and mutually beneficial relationship with them," Caryn Manning, vice president of advertising for the Detroit Media Partnership L.P., said in a statement. The DMP oversees the joint business and advertising operations of the The Detroit News and the Detroit Free Press. DMP works both with Valassis and News America, which together hold the entire market.

The idea to buy Advo originated with Schultz a decade ago, he said, when current Domino's Pizza Inc. CEO David Brandon, who declined to comment for this story, was running Valassis.

But a series of management changes at Advo kept the idea on the shelf until Scott Harding took over Advo two years ago.

"We started to kick around the idea of, 'Should we put the companies together?' " Schultz said. "My view was, the strategic rationale always existed. That never changed."

Once the deal went public, Schultz knew pressure would come quickly.

"You get pressure from your investors, board of directors, employees," he said. "You're wearing that acquisition; you're the one that drove it. At the end of the day, you're going to be responsible for results."

The greatest pressure came from hedge funds, according to Schultz.

"They tended to be pretty aggressive. Not necessarily in a negative way, but encouraging us to do what we needed to do to make changes quickly," he said.

Schultz's nearly 10 years of running Advo have been marked by change. Prior to the Advo deal, he shepherded changes that included rolling out 18 products and services to diversify from the struggling slick Sunday newspaper inserts the company has been known for since George Valassis started the firm in 1970 in Oak Park.

Schultz's tenure has continued practices started under Brandon that has seen the company recognized for its "best place to work" practices by Fortune, Crain's Detroit Business, Working Mother and the Michigan Business & Professional Association. Among the conveniences available at company offices are a salon, doctor's office and dry cleaning.

Next year, which analysts say will better represent the true impact of the Advo deal, will include new online products, more integration, a combined sales staff and a new brand name for Valassis and Advo products, Schultz said. The Advo name will be retired.

"This could be a company that earns a lot of money in the next couple of years," Atorino said.

As for Schultz himself, he said he has no plans to leave. "It's my intention to see this acquisition and integration through.


* The combined Valassis-Advo has 15,000 advertisers worldwide, including 96 of the top 100 advertisers in the United States, and 7,500 employees covering operations in 22 states and nine countries. About 1,200 employees are in Livonia.
* Valassis sued Advo last summer to get out of what was then a $1.3 billion deal, claiming that Advo misrepresented its long-term financial health. Advo countersued to enforce the July 2006 agreement, charging that Valassis' court action amounted to buyer's remorse. The two companies settled Dec. 19, 2006, and the acquisition was completed March 2.
* Valassis paid $1.2 billion, or $33.02 a share, for Advo and assumed refinancing of $125 million in debt from the company. To finance the deal, Valassis used an $870 million senior secured credit facility from a variety of lenders, $540 million in senior notes due in 2015, and cash.
* Valassis filed a lawsuit against rival News America in January in the U.S. District Court for the Eastern District of Michigan in Detroit, alleging antitrust regulation violations related to freestanding-inserts pricing. The case is tentatively set for trial in February.


A happy wife is a happy life

#34
marrelam

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Just got done with the reporter! She had already spoke with Tom Murray from RP/V. I think this should be great for our cause!! Yes, it's about money: yours, mine, theirs, etc.

#35
Cerin

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We get coupons about once a month in the mail that are distributed by MailSouth...most of the time they're just for local restaurants & other businesses, but this month it had several nice Colgate-Palmolive coupons in it... :)


I wish Valassis/RedPlum/whatever would just crawl into a hole and die. I get their garbage junk mail twice a week. I've called them repeatedly to get off their mailing list, but their voicemail maze just redirects you to their website, which is also garbage. I've "unsubscribed" myself using their website 3 times in the last three years, and I still get mailers from these scumbags. I really wish someone would start a class action lawsuit against them for wasting everyone's time and not providing a working unsubscription mechanism. You'd think a company would WANT to be notified when they're wasting money by sending you crap you immediately throw out.




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