The second development stems in the litigation underway with Macy’s. As you know, on July 13, the court granted Macy’s request for preliminary injunction with respect to certain categories of products. I want to take the opportunity here to clarify a few facts about this ruling and how it relates to our business with both Macy’s and J.C. Penney.
First, MSLO will be launching our products both in-store and online with J.C. Penney in the first quarter of 2013 as planned. Nothing about this ruling changes that. This case is primarily a contract dispute over how certain products are branded and sold, not about the validity of the partnership with J.C. Penney.
Second, the minimum guarantee under the J.C. Penney commercial agreement including the increase we just announced is not directly affected by the ruling. We are planning to be in J.C. Penney stores with a wide array of products for consumers early next year. And we are in ongoing development of categories and products as we typically are with all of our partners.
Now, let’s turn to publishing, our performance was largely in line with what we anticipated. We’ve talked in recent calls about our aggressive strategy to improve publishing performance. It is our largest business by revenue and turning it around is key to restoring profitability at MSLO in the near-term. Over the first three months of the year, we completed a transformation of our ad sales team bringing in considerable talent and setting our course to sell our print and digital inventory in the right way to engage marketers.We are also supporting this team with an editorial strategy designed to broaden the categories they can sell. With the full team now in place and engaging in the advertising community, we are now receiving feedback on our plans and what we can expect to accomplish. On a number of levels we feel good about the engagement the team has secured in the marketplace and the response marketers are having as we modify our print and digital offerings. But on the financial level the turnaround we are seeking will not unfold as quickly as we would like. Read the rest of this transcript for free on seekingalpha.com