LUX Biz: With Advertising Down, Condé Nast Cuts Back Internal Budget on American Arm
With advertising numbers down, even the most prestigious publishers have to cut back.
Condé Nast International has a large stake in many high-end titles that until recently allowed them to charge a premium advertising rate based on their market dominance. Due to the economic landscape and immediate hit on the LUX industry, it seems it has had to call in the expertise of McKinsey & Co, management consultants, to review current budgets and create a cost-cutting program aimed at the American arm.
The idea of sombre management consultants ploughing through the expense account of Vogue editor Anna Wintour and quizzing Graydon Carter, who runs Vanity Fair, about the cost of the title's lavish Oscars party is a delicious one for Condé Nast's competitors, which include National Magazines, publisher of Esquire and Harper's Bazaar.
The magazines that will be under the microscope include Allure, GQ and the New Yorker. Once accustomed to expensive stationary and lavish parties, it seems these perks might just be a thing of the past.
Charles Townsend, president and chief executive of Condé Nast in the US, paints a gloomy picture of the company's short-term prospects: “We feel strongly that the recovery of revenues lost through the recession will be painfully slow in the US luxury marketplace.” He emphasizes that McKinsey has been asked “to look at processes and approaches to our business, not salary lines and headcount.”
Normally grossing around $200m a year, experts say that it could actually plunge into the red for the first time in its history! It all makes perfect sense—the majority of their business has been dependent on LUX-brands and most of them have been forced to significantly cut their marketing budgets.
It seems this once extravagant company has now taken a more ‘frugal’ perspective by getting back to the basics. As of now, we’ll just have to wait to see. We do hope for the best and definitely, love our fashion magazines!!
We do wonder though how the folks at Condé are coping with getting back to the basics and getting in touch with their highly honed style statements? We wonder if they’ve found the spiritual nature in the process of purging? Or, if they’re stuck in the bitter victim thought process….? Either way, we’d love to hear where you’re at. It couldn’t be easy coming from the hailed gilded halls of wonderland, and now having to be on such a tight leash.