Independent focus: Vanguarde latest recession casualty

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The magazine ad downturn, 3 years old and counting, claimed another independent player last week as Vanguarde Media abruptly told its 70 employees it would immediately cease publishing its three magazines Nov. 24. The company filed for Chapter 11 bankruptcy protection the following day.

That adds more titles to the recession's ongoing toll, one stoked in large part by independent titles and publishers squeezed out of an unforgiving and increasingly consolidated magazine world. The December-January issues of Vanguarde's titles-Heart & Soul, Honey and Savoy, all of which came out 10 times a year-will be the last.

Within the past several months, Book and Gear folded, and Worth ceased publishing and was purchased out of bankruptcy by CurtCo Robb Media. General Media, publisher of onetime skin-magazine giant Penthouse, declared bankruptcy in August and its circulation has fallen to 530,000 from nearly a million in 1998. News of Vanguarde's shutdown was first reported on Adage.com on Nov. 24. AdAge.com QwikFIND aap19h

Vanguarde was founded by former Spin/Vibe Ventures President-CEO Keith Clinkscales in 1999, who wanted to build an African-American media empire. Ultimately, though, it ran out of time and money, as well the patience of its primary investor, Provender Capital. Mr. Clinkscales said he'd sought around a $10 million infusion into the company. But no suitor or combination of suitors anted up. Mr. Clinkscales said in '03 Vanguarde was projected to lose slightly more than $400,000 on revenues of about $27 million. Last year, the company lost around $7 million on revenues around $25 million.

Mr. Clinkscales said staying on plan would have brought the company to profitability near the end of 2004. But Vanguarde's lot was similar to many indie publishers-a never-ending scramble for capital. Last February, ex-BMG Entertainment CEO Strauss Zelnick's ZelnickMedia received equity warrants in Vanguarde in exchange for Mr. Zelnick advising the company through a seat on the board. Mr. Zelnick quietly left his board seat about a month ago.

`the scale question'

Vanguarde's three plays for the African-American market-young women with Honey, women's health with Heart & Soul and upscale general-interest with Savoy-suffered for falling into a magazine world conundrum. Their ambitions and looks required mass-consumer styled investment, but their sizes were scaled more like niche titles-without the leg-up that endemic advertising lends. At 419,000, Honey's was the largest in the Vanguarde stable-still quite a way from levels mass-seeking advertisers are comfortable with.

"That's a fair assessment," Mr. Clinkscales said. "We constantly faced the scale question." A big chunk of the capital Vanguarde sought, Mr. Clinkscales said, was earmarked "to enhance the quality of circulation, and get better-performing circulation down the road."

Mr. Clinkscales was initially backed by New York-based Provender Capital LLC and Black Entertainment Television's investment unit BET Holdings II, and that stake was personally taken over by BET founder Bob Johnson when Viacom purchased the network.

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