WH Smith backs down in row with distributors

Maxim, Dazed & Confused and four other magazines have been put back on newsagents’ shelves thanks to an 11th-hour reprieve by retailer WH Smith.

Maxim, Dazed & Confused and four other magazines have been put back

on newsagents’ shelves thanks to an 11th-hour reprieve by retailer WH

Smith.



The six magazines were threatened with delisting after WH Smith demanded

a 5 per cent uplift in retail terms from their distributors, Seymour and

MMC.



The retailer claims it is losing pounds 1.3 million a year selling

Seymour’s magazines and is looking for an improvement in margin from all

magazine distributors.



Controversially, WH Smith claims to be losing money on Maxim, which is

its 23rd highest seller. This would suggest virtually all magazine sales

are unprofitable for the nation’s largest retail chain.



WH Smith backed down after Seymour took legal advice that suggested the

retailer’s action was in breach of anti-competitive legislation and that

the threats amounted to criminal blackmail.



The parties have now agreed an eight-week truce during which the

distributors will scrutinise WH Smith’s figures and attempt to find a

solution. The distributors are resisting an increase in terms and point

out that publishers have to pay large increments for special shelf

positions on top of the retail margin.



However, one of the other four titles threatened with delisting, thought

to be Dreamwatch, has broken ranks and agreed to an increase in

terms.



The other three are Home, Airlines World and What Laptop?



Dazed & Confused, which recently paid WH Smith for an instore promotion,

got a last-minute reprieve following an emergency meeting between its

editor Jefferson Hack and WH Smith.



Seymour client services director Paul Hamtel commented: ’This incident

has sent a shiver down the spines of all publishers. We need to look at

their figures and agree a way forward.’



Seymour said it could not negotiate terms with WH Smith as its contracts

are with its wholesalers.



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