It’s been a busy few months for Hanley Wood, the b-to-b media company that specializes in the residential housing market and has endured—because of the state of the housing market—one of the worst five-year runs of any media company ever.
In January, the company recapitalized, reducing debt by $330 million to about $80 million, and receiving an influx of $35 million in new investment from three new private-equity owners, Oaktree Capital Management, Strategic Value Partners and Tennenbaum Capital Partners.
While gaining some relief from crushing debt was good for the company (if not for the prior owners), the company still faces struggles, having lost about $100 million in revenue between 2007 and 2011, with projected revenue for 2012 of about $140 million.
Then in April, the CEO, Frank Anton, long considered one of the industry’s best executives, transitioned to the role of chairman, and Peter Goldstone (pictured), who had been with the company for 11 years before moving to Atlantic Media in 2010, came back as CEO.
FOLIO: caught up with Goldstone at this week’s American Business Media Annual Conference in San Francisco. Following are excerpts from the conversation.
FOLIO: First, congratulations on your new job. Tell us how you came to be back at Hanley Wood as CEO.
Peter Goldstone [PG]: The company changed hands, and Frank Anton and the new owners had been discussing the transition of Frank to the chairman’s role. And the new owners decided to conduct a narrow search. They contacted me and asked me if I’d be interested in coming back. My answer was unequivocally yes.
FOLIO: The company’s performance has been, euphemistically, challenged. What’s the outlook?
PG: There’s been solid growth in the last year. Trade shows are starting to recover. Some of the market sectors are starting to perform better than others. Commercial design is one. Two years ago, Frank and I were able to secure a deal to become the official magazine for the American Institute of Architects. We took over their show and re-launched the official magazine, Architect. That platform has been performing very well.
The commercial sector wasn’t as battered as the residential sector, but our performance is attributable to the Architect launch and the relationship with the AIA. It was one of the biggest magazine launches of the last 10 years.
FOLIO: What other sectors show promise?
PG: The remodeling sector in residential is doing better than the new-construction sector. New construction is sort of bouncing along the bottom, although there are signs of recovery.
Most importantly, we have a more advantageous capital structure. Restructuring of the company manifests itself in a more flexible debt structure, and the owners are supportive of making strategic investments in the company. These investments will be in the form of acquisitions and in technology and talent that we need to drive the digital-first strategy.
FOLIO: Shouldn’t it be “customer first,” and not “digital first?”
PG: It’s always customer first. The wave of engagement in content consumption is happening in the most robust way in the form of digital platforms. It really comes down to this notion: You have to be constantly disrupting yourselves in order to serve your customers most effectively in every medium that they require.
FOLIO: What is your current revenue structure and what do you want it to be?
PG: We probably have 30 percent of overall revenue through digital platforms, which is pretty healthy. The goal is to get north of 50 percent over time in terms of digital revenue as a percent of the whole.
FOLIO: Last year, Frank Anton said HW had shut down 14 magazines, and might have to shut down a lot more, leaving three core titles. Speak to that comment.
PG: Every year we have to rationalize our portfolio, and place our bets on the brands that produce the most promise. Portfolio decisions are a day-by-day ongoing endeavor.
FOLIO: What criteria do you use when you rationalize your portfolio?
PG: It is incumbent on executives to be as close to the customer as possible, and listen and understand what the pain points are, and help them solve problems. And then you have to come back to the mothership and create the right products and services to solve their marketing needs.
FOLIO: What do you see as your company’s big opportunities?
PG: The opportunity is in creating a culture supporting and nurturing innovation and constant product development. You always have an opportunity to iterate and get things right as you go. You have to be willing to disrupt.
FOLIO: One of the speakers here said b-to-b media companies today need to be two companies, one for today and one for tomorrow. Do you agree?
PG: You don’t necessarily have be two companies, but you need to be one company always be prepared to reinvent itself. Frank always said, ‘If it’s good, make it better, if it’s better, make it the best, and if it’s the best, it’s time to reinvent it.’ At The Atlantic, they were always prepared to disrupt themselves. It’s really about running one company that has the commitment and is comfortable with innovation as a core cultural ethos.
FOLIO: What are your immediate priorities?
PG: To understand that the company’s been through a lot of challenges, but to get everyone to believe in a sense of optimism. These are premium brands that matter to the audience. That’s leveragable. Second is to push forward on this notion of digital-product development and digital innovation. It’s a golden age of media marketing. There are so many ways we can serve our markets and our marketing partners. We just have to make our bets in the right areas. And finally it comes down to talent. Do you have the right people in the right places to really push forward?
And you’ve got to have fun. Everyone misses their numbers. You’re going to miss numbers. You’re not to going to succeed every time, but you have to get up and say, ‘Today is going to be fun, because we’re going to try X, Y, and Z. You do what’s right for the business and doing what’s right for the business can be really fun.