G&J scales back as CEO forced to exit

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The exit of Daniel Brewster from his CEO perch at Gruner & Jahr USA Publishing marks the end of an era for the publisher of Family Circle, Parents and Fitness-one in which hubristic ambitions were backed by a big wallet.

When Mr. Brewster, 48, came on in June 2000, his stated mandate was to double the size of the $400 million company within five years. Three-and-a-half years later, Axel Ganz-Mr. Brewster's bearer of bad news, former boss, and interim replacement-said "to double the size [of the company]-this is not the issue anymore." He said that yearly improvement of G&J's revenue and profits were the current goal. (G&J USA fell short of this goal in '03.)

"Everyone has become a bit more modest," he said, adding the company now preferred "internal growth" to acquisitions.

gala Plans

A grace note of irony can be found in the fact that Mr. Brewster's departure will not derail G&J's most ambitious U.S. move in years-the expected launch of Gala, a weekly celebrity magazine it already publishes in France, Germany, Poland and Russia.

"A launch has nothing to do with people or a personnel decision," said Mr. Ganz, who's been cloesly identified with Gala and who described the prospect of a U.S. edition as "seductive." Internal prototypes of G&J's U.S. version of Gala show it to be a higher-toned take on the celebrity weekly, with articles on high-end travel destinations, fitness and food rounding out red-carpet coverage amid a more restrained tone than what's found in the likes of Wenner Media's Us Weekly. Its design improbably recalls a blend of the ill-fated Hearst/Miramax co-venture Talk and American Media's redesigned Star.

Two executives familiar with Gala spoke of an October launch, but Mr. Ganz said there was no "precise timing" for a launch. "We need to get the thing right" Mr. Ganz said. "It's a big launch, if we do it."

The company will search for a permanent CEO, but Mr. Ganz declined to say when one would be hired. He said "there's no need for changes" among the rest of G&J's executive ranks. Comments from key industry executives indicate that a serious search for a CEO did not begin before dismissing Mr. Brewster.

Undone

Mr. Brewster's fall has its Greek-tragedy aspects: An ambitious, well-regarded young executive-mediagenic and articulate-is given his big chance and a big checkbook to make his mark, and is ultimately undone by the choices he makes. His first major move at G&J was to purchase Fast Company for more than $500 million and couple it with newly acquired Inc. just before those titles entered a slump affecting all business books that still lingers. Mr. Brewster declined comment except to say he next plans to write a book.

Mr. Ganz declined to comment on where Mr. Brewster's tenure went awry, but a high-ranking G&J executive said the parent company was incensed by the negative publicity that came in the wake of G&J's court battle with its former partner in Rosie, former talk show host Rosie O'Donnell. (Ms. O'Donnell was traveling late last week and her spokeswoman declined to comment.)

That trial shone a hard light on the company's circulation practices after its top circulation executive admitted in an affidavit the company knowingly reported severely overstated estimates of newsstand circulation. Recent ad-page gains at G&J's teen title YM were tarnished by similar newsstand sale revelations, more of which came to light via an Audit Bureau of Circulations audit which was released earlier this month.

Some of Mr. Brewster's comments about circulation enraged advertisers and even some of his friends within the industry. "The industry has a black mark, and I resent that," one said.

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