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