rose by 67%. At just over 400,000, Honey’s circulation was the largest. Together, the magazines reached nearly one million readers. Even in a growing economy, it takes five to seven years before a magazine breaks even or turns a profit.
“The news was disappointing,” says Roy S. Johnson, assistant managing editor at Sports Illustrated as well as former editorial director at Vanguarde and editor-in-chief of Savoy. “It’s a testament to everyone involved that they made it this far,” says Johnson. He was editor-at-large at Fortune, but left to join Vanguarde and help create Savoy in 2000.
Lack of sustained funding may have been only part of Vanguarde’s difficulties. Mounting expenses, a flawed newsstand strategy, and problems with operations also contributed to its demise. For example, Clinkscales admitted that he overpaid for the company’s Park Avenue office space. Sources say that the company’s poor negotiations with its landlord cost the company close to $1 million a year and that Vanguarde was unable to break its 10-year lease. And insiders say the company spent millions to gain premium positioning on newsstands nationwide. Another area in which Vanguarde miscalculated: The company’s defunct Web arm, NeoMedia, spent millions of dollars trying to develop a number of Websites such as www.SideHustle.com, an entertainment industry job board.
For nine months, Vanguarde had been proposing a merger with Chicago-based BlackVoices.com, which is owned by Tribune Co. According to Target Market News, this would have created projected annual revenues of $50 million. However, a source revealed that the deal fell through because of a disagreement among investors on how the stock would be distributed.
When asked why the board did not seek other options such as selling all three publications, or scaling back operations and continuing to run its most viable publication while closing down the other two, Provender managing partner and CEO, Fred Terrell, declined to comment. Clinkscales says up until the last minute all efforts had been exhausted for raising the capital.
Chapter 11 bankruptcy filing will allow Vanguarde to retain certain assets while selling others. It will also allow the corporation to put a restructuring plan in place. The great irony here, says one insider, is that there seems to be a great deal of interest in the company all of a sudden. Several parties–including Clinkscales and other key people from Vanguarde–are interested in buying the magazines out of liquidation and giving them a new life in publishing.