Johnson Publishing Co., the Chicago publisher of Ebony and Jet magazines, has sold a minority stake to JP Morgan Chase & Co. and will use funds raised through the investment to accelerate its growth plan.
CEO Desiree Rogers declined to say how much the private-equity arm of JP Morgan invested, but she told Crain's Chicago Business that the stake is "substantial."
The funds will be used to expand the brands' digital presence, and increase marketing for Johnson's magazines and its Fashion Fair cosmetics line.
The company also plans to bring some functions in-house, hiring a general counsel, head of human relations and vice president of digital, Ms. Rogers said. She also said Chief Marketing Officer Rod Sierra has left to pursue his own business.
Chase is "supportive of the strategic direction" the company has taken over the past year, Ms. Rogers said.
"We are delighted to partner with our client Johnson Publishing Co., with which we have worked for more than 40 years," Greg O' Hara, leader of JP Morgan's Special Investments Group, said in a statement.
Johnson Publishing Chairman Linda Johnson Rice, whose parents John and Eunice Johnson started the company in 1942, has been seeking to revive declining circulation and ad sales for the magazines in a publishing industry that has seen an exodus of both readers and advertisers to online alternatives.
Ms. Johnson Rice said her father's first major checking account was with Chase. The bank has also advertised through the company.
Ms. Rice last year hired her longtime friend Ms. Rogers, formerly the social secretary in the Obama White House, to revamp the company and restyle the magazines.
Part of Ms. Rogers's digital plan is to strike partnerships with more vendors online to sell services and products to readers, she said. "Mainly now what we're doing is refining our strategy," she said.
The monthly Ebony has used direct-mail marketing and discounted subscriptions to help return its circulation to 1.25 million, Ms. Rogers said. That's the base rate that is touted with advertisers. Ebony's total paid and verified circulation was 997,173 as of the end of last year, according to the Audit Bureau of Circulations.
Jet's circulation has jumped to 800,000 weekly, the company said. That's up from 703,944 as of the end of last year, according to ABC.
Ms. Rogers is also considering cutting costs by teaming up with other publications to buy materials, such as paper, at bulk prices. The company also previously announced it's selling its current Michigan Avenue office building and moving to a new headquarters in the city.
Johnson Publishing is one of the biggest minority-owned firms in the Chicago area, with revenue of $200 million in 2009, according to a Crain's list published in November. The company has about 125 employees, down from 250 at the end of 2009.
"JP Morgan Chase's investment in our firm is a logical outgrowth of our longstanding relationship," Ms. Johnson Rice said in a statement. "It positions Johnson Publishing for continued growth as a family-owned publisher of the black community's most-trusted media brands by providing financial resources to take our iconic Ebony and Jet magazines to the next level and accelerate our growth strategy for Fashion Fair Cosmetics."
The Chicago Tribune first reported the deal today.
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Lynne Marek is a senior reporter at Crain's Chicago Business. Todd J. Behme is deputy online editor there.