UBM Buys Business Journals Inc. for $69 Million
UBM Buys Business Journals Inc. for $69 Million
By Jean E. Palmieri
UBM Americas’ trade show universe is getting larger.
The U.S. division of London-based UBM plc, the largest trade show organizer in the U.S., has acquired Business Journals Inc. for $69 million in cash. The deal brings together UBM’s shows, including WWDMAGIC, Project and Coterie, with BJI’s consortium of events. These include MRket, AccessoriesTheShow, EDIT, Fame, Moda and Stitch.
This story first appeared in the April 22, 2016 dailty edition of WWD. See More.
In 2015, BJI’s revenues were $40 million — $33 million from events and $7 million from other marketing services. The acquisition is expected to make a modest post-tax contribution to UBM this year and in 2017 is expected to achieve a return on investment in excess of UBM’s weighted average cost of capital.
Britton Jones, president and chief executive officer of BJI and fourth generation to run the family-owned company, will remain onboard along with the entire BJI staff, according to Chris DeMoulin, managing director of the Fashion Group for UBM Americas.
“We’re welcoming the whole team,” DeMoulin said. Ultimately, the men’s group will report to Erik Ulin, president of men’s for UBM’s Fashion Group, while women’s will be overseen by Tom Nastos, president of women’s. “But we both have growing businesses and we’ll build on our strengths.”
DeMoulin cited the “complementary nature of the businesses” as the key motivation for the deal, adding that incorporating BJI’s shows under UBM’s umbrella will result in an easier and more seamless experience for exhibitors and retailers.
DeMoulin said he had been aware of the BJI shows since joining UBM eight years ago and the conversations about joining forces “got serious in the last couple of months.
“We all do post-show surveys,” he said, “and the one thing everyone said would make things better, would be to bring everything together in one venue. This will create one integrated experience and will be a better way for buyers to see brands and brands to see buyers. The logic was inescapable.”
The first events that will take place under the new combined structure will be the women’s accessories shows set for May 2-4 at the Jacob K. Javits Center in New York. BJI’s AccessoriesTheShow, Fame and Moda will join UMB’s Accessorie Circuit and Intermezzo Collections.
In Las Vegas, where both companies hold shows in February and August, MRket will relocate from its home at the Sands Expo center to Mandalay Bay to join Project, and BJI’s women’s shows will be moved to the Las Vegas Convention Center to join WWDMAGIC and FN Platform. “We’re definitely doing that,” DeMoulin said. In New York in July, Project and MRket are both in the Javits Center.
He said, while their locations may shift, each of the shows will retain their names and distinct market positioning. “All of the brands have history and loyal customers so we’re in no rush to make any changes,” he said. “If we do make any changes, it’ll be more gradual and market-driven.”
Physically moving the BJI shows to join UBM’s will allow the company to explore the “right brand adjacencies so we can make the shopping experience more intuitive,” DeMoulin said.
The only change that is expected immediately, he said, is the combination of Fame, BJI’s juniors show, with UBM’s newest addition, FWD, which addresses the same market. “They’ll probably come together relatively quickly,” he said.
Any other combinations or shifts will “take time. First, we’ll get them into the same building, then we’ll let the market decide,” DeMoulin said.
In order to differentiate the shows in the combined location — Project in Las Vegas, for example, is already massive — will be addressed through “neighborhoods” or distinct signage.
Ulin, who oversees Project show, admitted the Las Vegas edition is a “daunting experience,” so the company will “make neighborhoods clear so you know what to expect when you walk in. We’ll take something big and make it smaller.”
On the men’s side, Project leans more contemporary and addresses more of the young men’s and mass ends of the business than MRket, which is “more tailored and traditional,” DeMoulin said.
Even so, there is “clearly buyer crossover,” he added — as much as 60 to 70 percent, so having BJI’s shows in the same venue will be “much more convenient. Now it’ll be easier to see what else is available.” Ulin added that “there are a good slew of specialty stores that shop MRket that we don’t attract today.”
On the women’s side, Nastos said the company will now operate five shows in New York — Coterie, EDIT, AccessoriesTheShow, Fame and Moda — all of which are held at the Javits Center. “We make it convenient for the buyers to cross shop,” he said. Stitch joins the calendar in September during the women’s market.
While retailers will shop all the shows, there is almost no overlap in exhibitors, they said. “We’re not in favor of double exposure,” Nastos said.
Another advantage of combining forces is that buyers no longer have to hassle with getting badges for each individual show and they can now “spend more time at the venue,” Nastos said.
In addition to its trade show portfolio, BJI also publishes two magazines: MR for the men’s market and Accessories for the women’s market. DeMoulin said UBM will “get to know those properties as well” and these publications “will help our markets stay informed and connected 365 days a year.”
BJI also has a custom publishing division that produces 52 publications and operates an unrelated business, Turbomachinery International, which Jones said will “find a new home within UBM.”
Jones said BJI was founded by his great-grandfather as “strictly a business-to-business publishing company.” In 1997, it entered the trade show business when it acquired Fashion Accessories Expo. Ten years later, it purchased the West Coast Exclusive “because we were having good success in women’s and wanted to get into the men’s wear business,” Jones said. “But we only wanted to do it if we could create value for our customers.”
Since 2013, MRket has been part of the Modern Assembly, a consortium of trade shows in Las Vegas that include Liberty Fairs, Capsule, Agenda, AccessoriesTheShow and Stitch, an association that will now end.
Jones said Modern Assembly was a “very loose affiliation” that initially had hoped to create an enhanced buyer experience. But the shows were still run separately — requiring retailers to register for more than one badge to attend — and were merely in the same location at the Sands Expo center. “This deal will produce that enhanced buyer experience in a more-comprehensive way,” he said.
After four generations, Jones said selling the family business was a decision that he “thought long and hard about…BJI has been an acquisition target for many years and I believe this is what our industry needs, bringing the best brands and team together to work side by side collaboratively.”
He said once “we stop fighting each other and trying to steal each other’s customers, we can devote our resources to bringing in new designers and brands, something we feel very strongly about. This is not about slashing costs, but growing market share.”