Mailing magazines and developing land in New Mexico keep AMREP hopping. About 80% of the company's sales come from newsstand distribution and subscription and product fulfillment services it provides through its Kable Media Services and Palm Coast Data subsidiaries. The units serve about 200 publishing clients by managing subscriptions and mailing 900-plus magazine titles. Through its AMREP Southwest subsidiary, the company develops its Rio Rancho property (roughly 17,300 acres) as well as certain parts of Sandoval County outside Albuquerque, New Mexico. AMREP was founded in 1961. Its largest shareholder in 2010 scrapped plans to take AMREP private and merge it with another firm.
Faced with declining revenues and shrinking margins, the company has been streamlining its subscription fulfillment services unit. As part of the consolidation plan, AMREP shuttered its Marion, Ohio, fulfillment center in 2008 and cut about 200 jobs, roughly 10% of the workforce. More recently it closed two other facilities in Louisville, Colorado, and Mount Morris, Illinois, and transitioned operations to its existing Palm Coast, Florida, facilitiy. The consolidation plan aims to help AMREP slash spending, boost efficiency, and improve customer service. The firm has also made changes to its top management. In August 2011 AMREP named Theodore Gaasche president and CEO, and Michael Duloc head of the company's Media Services businesses.
AMREP's real estate ventures have not always panned out. The company expanded its homebuilding activities to California, Colorado, and Oregon in the 1990s, only to return to its New Mexico roots amid losses. AMREP stopped developing single-family and multi-family homes in those states to focus its development energies exclusively on Rio Rancho, which is now the source of virtually all of the firm's real estate revenues. AMREP Southwest has suffered a severe decline in acres sold in recent years, from about 1,050 in 2007 to about 150 in 2009. The firm has tied the decline to the mortgage crisis and a decline in home sales. Also semiconductor manufacturer Intel, Rio Rancho's largest employer, has cut jobs at its facility there, with negative repercussions for AMREP's real estate sales prospects.
Vice Chairman Nicholas Karabots is AMREP's largest shareholder with about 60% of the company's common stock. In September 2010, Karabots abandoned an attempt to acquire the remaining shares for about $12 each and merge AMREP with another company he controls. The firm's second-largest shareholder behind Karabots is director Albert Russo (and his family), a real estate and textile export executive, who owns about a 20% stake. – less