Tuesday, 18 August 2009

Condé Nast Is Forced To Cut Corners As Luxury Brands Advertise Less – 18/8/09

Last week, we reported that consulting firm McKinsey has been brought in to audit Condé Nast Publications, the publisher of Vogue, Tatler and GQ (see the MO Down for 14 August). This week, McKinsey will deliver their report, which is rumoured to be a cost-cutting program for the American arm of the group.

An article in The Guardian, No More Easy Living For Condé Nast, discusses the existing cost-cutting measures at “a magazine company that operates in the upper echelons of the market, and where editors – and publishers – are expected to fraternise with the luxury goods houses that bankroll many of their titles …”

The article also stated, “The group's titles are heavily reliant on advertising from luxury goods houses and fashion brands, which have dramatically curbed their spending this year.”

Charles Townsend, president and chief executive of Condé Nast in the U.S., was quoted by The Guardian as saying, "We feel strongly that the recovery of revenues lost through the recession will be painfully slow in the US luxury marketplace." But he emphasises that McKinsey has been asked "to look at processes and approaches to our business, not salary lines and headcount."

We’ll keep you posted on whether McKinsey forces Condé Nast to tighten another link on their fashionable chain belt.

Article by: Melinda O'Rourke

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Who's behind the MO DOWN

Melinda O’Rourke is the founder and Director of MO Luxury, a dynamic, Sydney-based management firm specialising in luxury brands and services. Melinda and her associates at MO work with local and international brands across prestige retail, fashion, fine jewellery, timepieces and specialised services. Melinda is well-connected, well-read, and well-versed in the demands of the luxury market and its client base. Her advice is firmly based in objectivity and ultimately, accountability. Melinda offers constructive counsel and both strategic and creative thinking and is able to draw upon a strong network of specialised talent to compliment the MO Luxury team as needed. Melinda enjoys excellent industry relationships and is regularly quoted in the business and fashion media. Read more about MO Luxury, www.moluxury.com.au