Dmg Spring Cleans, Dusts Home Shows

Firm stuns the industry by cutting 15 consumer shows from its portfolio

By Rachelle Crum -- Tradeshow Week, 6/12/2006

Dmg world media did a little spring cleaning at the end of May. Well, more than a little.

Due to "dramatic changes in the consumer show industry over the last few years," the Larkspur, Calif.-based show management firm will reduce its North American consumer home show portfolio by nearly a third, from 53 to 38 shows. Nine shows will be divided into two parcels and made available for sale, and six will be canceled, including a show scheduled for launch. The company is closing four satellite offices and laying off 30 of its 120-person home show staff.

Nick Curci of Corporate Solutions will handle the sale of six U.S.-based shows; dmg will sell three Canadian shows itself.

Dmg employees in the Montreal office, responsible for the remaining Montreal and Ottawa home shows, will move to Toronto. The Indianapolis operations will be consolidated in Minneapolis. The Austin operations will moved to Larkspur, and the Boston office will close.

The decision startled some smaller producers in the consumer home show industry, who say their shows are doing better than ever.

Dmg, however, said the divestiture makes absolute sense — the view is much different from the top.

"The majority of home show producers are smaller; we're the 800-pound gorilla," said Tom Baugh, vice president of Home Interest North America for the firm, which is the continent's largest producer of consumer home shows. "We see some trends, some movement in markets that, by virtue of our scale, other people don't see."

Baugh said the company had a difficult time with attendance promotion for some of the shows.

"The inefficiency of traditional advertising, in our analysis, has really escalated in the last couple of years. We have to work much, much harder to get the word out," he said.

The shows dmg plans to divest were doing marginally well, he added. Although none was decreasing in square footage, some were declining in attendance.

For instance, attendance for the 11-year-old Dayton Home and Garden Show dropped by more than 4 percent in 2005, while its net square footage remained the same and the number of exhibiting companies grew by more than 3 percent, according to Tradeshow Week research.

Another, the 26-year-old Minneapolis Home & Garden Show — Fall Edition, in 2005 saw a 26-percent decrease in attendance but a 7.4-percent increase in net square footage and nearly 13 percent more exhibiting firms. Dmg will continue to operate the spring Minneapolis Home & Garden Show.

Baugh said the shows it sells would be more valuable to a smaller company. "It would make sense for them to be in the hands of an entrepreneur with less overhead."

He said the move doesn't represent a retreat by dmg from the consumer show world. "The idea here isn't to stay at 38," Baugh said. "Now as we add shows, we will have gone through that learning curve."

He added, "We are actively looking at acquisitions right now and will continue to do so. We are always aggressively looking; we are also looking at launches."

One potential buyer may be Craig Gitlitz, president of Mineola, N.Y.-based American Consumer Shows, which in 2007 will produce 20 consumer home shows.

"I'm always looking for intelligent acquisitions, so I would look at it," he said.

Nevertheless, Gitlitz said, dmg's news was "a major surprise," since the dramatic changes dmg anticipates aren't evident to him.

"I'm not sensing any change in the show landscape. I don't see any slowdown whatsoever. We're growing quickly and we're growing profitably. Consumer shows have never been stronger in the home improvement category," he said.

Garry Edgar, president of Wellesley, Mass.-based Paragon Group and a Natl. Assn. of Consumer Shows board director, had the same view as Gitlitz.

"We don't see any issues with consumer shows," Edgar said. "This is going to be our best year ever," he said. Paragon currently produces five consumer shows — four for autos, one for golf.

Nevertheless, Edgar added, "It happens all the time. There's a portfolio change."

NACS President Jim Fricke, executive director of the Colorado Garden Show firm, said, "I'm sure there will certainly be plenty of interest in the properties."

However, he added, the news "kind of floors me. I really haven't heard anything negative as far as the overall industry goes."

Curci, on the other hand, said he was surprised that the divestiture "didn't happen earlier." He added, "It's only a natural progression. It absolutely makes sense for them to do this."

Corporate Solutions recently handled the sale of Plus Events, a producer of six consumer shows in the sportsmen's and home and garden markets, to AGI Events.

Consumer shows in 2005, according to TSW's annual consumer show report, saw increases of 13 and 5.6 percent in net square footage and exhibiting companies, respectively, and a decrease of 0.7 percent in attendance.

The consolidation of dmg offices, Baugh said, will help integrate employees into the company culture, considering that the soon-to-be-closed offices that operated one or two shows were working in isolation. The hub office structure allows for greater efficiency and "makes it much easier for growth," he said.

Baugh added, "It was only fitting that we look at our business and determine how it needs to evolve to get ahead of market trends. We are convinced that an element of our success will be operating a more nimble business that can more easily and effectively adapt to a new direction."

In 2005, dmg acquired the St. Petersburg Suncoast Home & Garden Show, the St. Petersburg Suncoast Home & Remodeling Show and the Tampa/St. Petersburg Home & Patio Show from Florida State Trade Shows; the biennial Bathrooms & Kitchens Expo from Quantum Business Media; the ad:tech series of conferences and exhibitions from JD Events; Expressions of Culture, producer of SOFA Chicago and SOFA New York; and iMedia Communications.

Also last year, dmg sold the California Market Center showroom facility in downtown Los Angeles to Jamison Properties. This year, dmg sold two tradeshows for the Canadian trucking industry, Expo Cam and Cam-Expo, to Newcom Business Media.

Dmg employs about 700 people and operates more than 30 offices in the United States, Canada, the United Kingdom, France, the United Arab Emirates, China, Australia and New Zealand. The company is a subsidiary of the Daily Mail and General Trust, headquartered in London.