VANTAGE POINT – H. Allen Fernald

Down East Breeze

Allen Fernald would have been a success anywhere—in fact, he spent over a decade in New York City doing mergers and acquisitions, and helping turn Holt, Rinehart and Winston into one of the world’s largest publishers of college textbooks.

But Maine was always calling to him. He had spent childhood summers on Plum Island, then followed his brother to UMaine, where he fell in love with a tall beauty from Southwest Harbor named Sally Carroll he met at a freshman dance.

Fernald answered Maine’s call for good when he decided to purchase Down East magazine from founder Duane Doolittle in 1977. He moved Sally and their three kids to the midcoast and tackled the project of turning a homespun business with subscriptions written on index cards into a modern publishing company with multiple titles and revenue streams, including the largest book list published in Maine.

Now officially retired, he gives away his considerable expertise to several boards, and, along with Sally, is just as generous in sharing his financial success. After reading his vitae in Who’s Who, one item the book left out is not at all surprising:
Fernald is also one hell of a tap dancer.

You were born and raised in Haverhill,
Massachusetts. What was your youth like?

I was born in 1932, so I  grew up in the late Depression era—though my family was not much affected by it, because my dad ran paper mills. I can’t answer much about grade school, but in high school, I was a tap dancer and exhibition ballroom dancer. My partner and I used to do minstrel shows and church fairs.  I was also in a number of the clubs, the honor society, DeMolay, those sorts of things.

We were very much involved, of course, in World War II. I can vividly remember December 7. I know exactly what I was doing that Sunday afternoon, what was playing on the radio. My brother was driving my Dad’s new Lincoln.

When did you meet Sally?

That’s a romantic story—and I love to tell it! My brother had gone to the University of Maine; Arthur thought he was going to be a chemical engineer, a paper pulp specialist, and I didn’t look anywhere else.

Sophomore year I came back early to help open the fraternity house. On freshman week they had what they called a freshman mixer, and I went over to look over the crop of new women. Partway through the evening I spotted this tall, good-looking woman, and every time I started across the floor to ask her to dance, somebody else got there first. I danced with other people, but I still wanted to dance with that woman. They started to play last dance of the evening, and I said if I find her, I’m going to do it! So I look, and she’s dancing with someone else. So I tapped him on the shoulder and cut in—and we’ve been dancing ever since.

You two graduated, got married in 1956, and started out in Boston. How did you end up in New York at Holt, Rinehart and Winston?

I went to work first at the National Shamut Bank, then the Carter’s Ink Company, where I was in sales and marketing. I then went to Western Electric Company. My work there was all in purchasing, and I was known as a chaser—of parts and pieces of what was then a very large manufacturing operation. I got promoted to section chief and buyer, then was transferred to New York City and worked at corporate headquarters and was on, quote, the “fast track.”

Well, the fast track slowed suddenly because of the end of the the Korean War and all the people being riffed back into the system, guys who deserved to go back to where they were. So I went to New York University and got my MBA. I was graduate assistant to the department head, and one day he got a call from a guy who was doing work for Holt, Rinehart and Winston, one of the old-line publishers. He needed an assistant to do merger and acquisition work, and I became his assistant.

We were busy acquiring companies when over one weekend Holt’s major shareholder, Clint Murchison, sold 12% of the company to Bill Paley. The dance went on, until finally we were absorbed by CBS.

What was your role at Holt after that?

When CBS bought the company, I was ready to leave. The president of Holt, who had remained, asked me if I would take on an assignment to be head of administration. He wanted to be careful as they merged into CBS that the Holt people weren’t disadvantaged. I said, “OK, I’ll do that, it’ll probably take a year, and at the end of the year, I should leave.” But they didn’t want me to leave, and they made me vice president.

In addition to administration work, which is all the personnel and legal and so forth, they asked me to do management consulting for the college publishing division. I used the people there to draw out their own ideas-—I didn’t know much about publishing—and we came up with a report that I presented to the new president. When he read it, he had this quizzical look on his face and said, “That’s very good, Mr. Fernald. Now I want you to run it.” I said, “That’s not fair, all these people all worked on it!” He said, “I want you to run it. What don’t you understand? Life’s not fair. You did the job, and you did it right.” That’s how I got to be head of what was then the third-largest college textbook publisher in the world.

Did you enjoy your work?

Loved it, loved New York City, and was very active in the publishing circles. I was a commuter, so I had the chance to read The Wall Street Journal and The New York Times on the way in, and on the way out, I had a briefcase of work that my administrative assistant had separated into “read and sign,” “read and assign,” and “if you get time.”

CBS was good to me; it was a killer corporation, really. They had so many young MBAs  it was interesting to have the tables turned, to be running a division, and have some bright young guy come to in and say, “One-third of the books you publish don’t really make anything, so why don’t you cut out that third?” I’d say, “I’d be glad to. You tell me which third.” You do that over and over again, justify what you’re doing, and I got kind of fed up with it, frankly.

So you were ready to move on when you bought Down East magazine from Duane Doolittle in 1977.

I was. One of my friends who had left CBS and had gone with Clay Felker at New York magazine had been up here to look at acquiring Down East-. He said, “I saw something that would be just right for you: Down East. Do you know it?” I said, “Yup, my father-in-law gave us a subscription when we were married.”

We were coming up on vacation, and I called Duane. We met and had a very good relationship, which went on for a year or two, and eventually we bought it.

What was the transition like? What exactly did you buy?

It was only Down East magazine when we bought it. It was suffering from about 20 people actively interested in buying it. For a small company, that can almost destroy it—everyone’s ginning up figures and answering questions and people are afraid to turn their heads—so circulation was declining.

Duane only had an accountant come in once a year and settle up for taxes. Circulation was on three-by-five cards with little notes, “She had a baby,” “She’s in a nursing home,” and so on. There were two telephones, one upstairs and one downstairs. In the early issues of the magazine, there was no color; they finally got color pictures in the center, and Duane would sell overruns of that color section. So there were a lot of things to do when I got there.

Part of it was to get on a financial reporting system, doing some analysis of where the subscribers were. It was only published 10 times a year, and I thought, hmm, with the same number of people we could do 11 issues, and if we can do 11 issues, we probably can do 12.

Also, the editorial was changed. I inherited Dave Thomas as the editor; he had come just before me. He was out of New York, had been with major magazines and came to Maine to get his life back, I guess. He was planning to make dramatic changes to the magazine. I figured he knew more about magazine publishing than I did, that I would just watch financially. My theory was if I was going to be the editor of the magazine, I didn’t need to pay an editor; I paid me to run the company, and look at other things that were melded into the corporation.

You also published calendars then, right? When did you start introducing other products?

We were the biggest calendar publisher in Maine, selling 50 or 60,000 of the wall calendars, and 20 or 30,000 of the engagement calendars. That business is still going for us. It was a while before it was other magazine titles. We also got into the solar heating business.

When was this?

Hanson Energy, ’81 to ’85. They were solar air panels, inexpensive, self-installed. I went down to New York and brought a panel in to Popular Science, and, by God, they put it on the front cover. Should have sold the solar business right then. There were government subsidies, and when oil prices came way down, the subsidies ended, and that was the end of that business. It was a sad experience.

Shooting Sportsman was just the opposite, I’m told. How did that title come about?

A broker that I knew in New York came to me and said, “I have a magazine for free for you. A couple of kids started Shooting Sportsman magazine, and they’re not doing well. Would you be interested?” We in essence bought it for the debt, which wasn’t much. It’s now number one in its field. It’s a really high-end magazine, with high demographics. The average shotgun in there is $3,500, and most of the people who are our subscribers own at least six.

Advertisers certainly want to reach high-end customers, yet some people are predicting the demise of print.

We don’t believe it. We believe that in niche publishing, there will always be room for print. Now, we’re not blind to the impact of digital. All of our magazines are brands, and each of the brands also does digital, does book publishing, and some special publishing. There are studies that show that people will follow up on something digitally, but they get the idea from some print media they’ve seen. Our market for Down East is the 45 to 60 group, and they have very high demographics. We know through surveys what their home value is, what their income is, what their educational level is. That’s the market that has the money, and it works for us. Books, 6% of the book market this past year was digital. That means 94% were hardcover!

When did you step down as CEO of Down East Enterprise?

At age 70. However, for two years prior to that our son Bob was really running the company on a day-to-day basis. Both of our sons had been in the business—Tom ran the book division and Bob was the CFO. Tom and his wife wanted to have a more urban experience, and at familly council they announced that they were going to be leaving. He went out to San Francisco and he’s now the chief operating officer of Chronicle Books, which is about 10 times the size of Down East.

Any advice on transitioning to retirement?

You need to have a plan, and make it early. I knew first I wanted to be a docent at the Farnsworth Museum. Two, that I wanted to build a ship model—I haven’t started working on that yet. Three, I’d like to take at least one major trip a year with my wife. I knew I wanted to be active at the University of Maine. Sally and I are cochairs of the capital campaign there, which is $150 million and we’re at $135 million right now. And I want to do something with my art, either Japanese painting, which I’ve done a little of, watercolors, which I’ve never done, or oil painting.

Are you doing much dancing these days?

We’ve both slowed down a bit. I had open heart surgery in March, though I could tap dance right now. The dancing today, you don’t hold the woman, you sort of jog around. I can do that, but it’s no fun! The fun is holding a girl in your arms and really moving and listening to the music and having your steps match each other. That’s dancing.

Tagged as: Allen and Sally Fernald, Down East Magazine, H. Allen Fernald, Maine business icons