Circ scandal fallout: G&J focuses on fundamentals, scraps plans for celebrity title

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Gruner & Jahr USA Publishing's decision last week to shutter its magazine-development arm finalizes the denial, for the foreseeable future, of company dreams to launch its celebrity-and-lifestyle weekly Gala in the U.S.

"Until we are certain" core company brands are up to speed, said G&J President-CEO Russell Denson, "we are not going to be diverting attention to launches." Mr. Denson's decision to close the unit was his first major managerial move since taking the reins of the company last month.

The Gala project had been "on standby," said Axel Ganz, G&J's international head, and who's closely identified with G&J's European editions of Gala. "I'd put it on hold."

G&J's announcement resulted in the departures of three staffers, including Susan Toepfer and Jane Farrell, editor and executive editor, respectively, of now-defunct title Rosie. After the Rosie O'Donnell joint-venture title imploded in 2002, Ms. Toepfer and Ms. Farrell moved to the development unit. Last year, G&J produced two 80-page-plus U.S. versions of Gala-complete with full articles and ad pages-and showed them to key print buyers. Executives familiar with the project told Ad Age in January that distributors had been primed to expect at least a soft launch of Gala in the fall.

Ms. Toepfer's team had investigated other projects in recent months, but under much different circumstances than during the reign of former CEO Dan Brewster, who arrived in mid-2000 with a mandate to aggressively grow the company.

`blocking and tackling'

Ms. Toepfer did not return calls. Even though as recently as January Mr. Ganz did not dismiss notions Gala still might launch imminently, it was clear from his and Mr. Denson's comments that the German-owned company sought a less-grandiose approach.

"We have to focus on fundamental business practices-I would say the basic blocking and tackling of publishing," Mr. Denson said.

G&J was tarnished by 2003's revelations it overstated newsstand sales of Rosie and YM. Key brands continue to struggle, with ad pages at former high-flyer Fast Company down 26.7% through June and YM's ad pages down 46.4% in the same period.

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