WAL-MART BANS THREE MEN'S MAGAZINES

Dan Alaimo

BENTONVILLE, Ark. -- Wal-Mart Stores has discontinued the sale of the three most popular magazines appealing to men.

The company this month confirmed that it no longer carries Maxim, ranked 13th in single-copy sales for 2002 by the Magazine Publishers of America; Stuff, ranked 22nd; and FHM, ranked 23rd. Together, the three accounted for total U.S. sales of 1.76 million copies last year, according to MPA.

By comparison, No. 1 ranked Cosmopolitan sold over 2 million single copies last year, MPA reported. Maxim and Stuff are published by Dennis Publishing, New York, and FHM is put out by London-based Emap. (Note: SN's parent company, Fairchild Publications, New York, also publishes Details, which competes in the men's magazine category.)

"Initially, we carried the magazines in response to customer demand," said Wal-Mart spokesman Tom Williams in a prepared statement. "But we have had customers around the country that have consistently been telling us that they are uncomfortable with us carrying these magazines. In this case, we had to balance the interests of two different customer sets, and ... we made the decision to stop selling these magazines. It was a judgment call on our part."

"This is a really great illustration of Wal-Mart's power and desire to shape their product offering to fit their brand and what they want to be," said a consultant with knowledge of the magazine business.

The magazines have been described as "racy" and "pushing the envelope" by industry sources, but in a way similar to Cosmopolitan, published by Hearst Corp., New York. A Wal-Mart spokeswoman said she knew of no plans to ban such women's magazines.

"There is definitely a double standard," said T.J. Montilli, newsstand manager, Dennis Publishing. Wal-Mart is less than 3% of Dennis' newsstand sales, and less than 1% of its total sales, he said. Maxim is authorized in 90% of retail outlets that carry magazines, he said.

"We publish for our readers, and Wal-Mart serves its customers. We are not going to condemn that. We don't agree with their decision, but it is business as usual at Dennis Publishing," he said.

FHM has only been carried by Wal-Mart on a consistent basis since the beginning of the year, said Cathy O'Brien, spokeswoman for the publication. "For 2003, FHM's sales figures at Wal-Mart are not significant and represent only 1% of FHM's total circulation," she said.

"We believe the public wants to purchase FHM and similar titles in the men's category in Wal-Mart. We agree to disagree with Wal-Mart, but we will continue a dialogue with them regarding this decision," O'Brien said.

"This incident shows that decisions about listing or not listing a product go well beyond the product performance," said Bill Bishop, president, Willard Bishop Consulting, Barrington, Ill. "It involves social, moral and political issues, as well as the pressure groups. I think you are going to see more and more of this kind of thing, and it will raise some pretty interesting questions."

"The retailer -- the guy with the keys to the store -- can do anything he wants. He has got to keep his customers happy, and that means carrying product that he may not want to carry, but it also means not carrying products that make his customers unhappy," said an executive with a well-known magazine consultancy.

The impact of Wal-Mart's decision on supermarkets is uncertain, sources told SN. While it could present an opportunity to pick up sales abandoned by Wal-Mart, other retailers could also risk alienating customers who also might be offended by the magazines, the sources said.

"The same day we lost Wal-Mart, we picked up a major conservative supermarket chain that we were previously not authorized in," Montilli said.

"We do not anticipate Wal-Mart's decision to have any impact on FHM's circulation" in any other retail outlets, O'Brien said.

A spokeswoman for the MPA deferred to the organization's official statement: "The MPA believes in the right to freely disseminate legally protected material. It also believes that, in this free society, consumers should have the freedom to decide for themselves what they want to purchase. It is unfortunate that a highly vocal minority is trying to deprive millions of Americans -- from all walks of life and in all parts of the country -- of their right to purchase their favorite magazines."

Montilli concluded, "The majority of our readers love the product as it stands. We're not going to change it just for one big retailer, no matter how big."