Commentary

Conde Nast's UK Slump Shows Pressing Need For New CEO

Editor's Note: This column has been updated from an earlier version that incorrectly reported Glamour UK ended print publication in 2017. The magazine is printed twice a year.

Condé Nast Britain responded to this column with the following statement, printed in its entirety: "Condé Nast Britain's underlying profit in 2017 was positive. Due to exceptional costs, inter-company accounting and the contributions to the closed DB pension scheme, the picture in the public domain is not representative of our profitability."

Condé Nast’s U.K. business slumped to a loss as sales fell 6.6% in 2017, the latest data available in a public filing revealed last week.

Given the Anglophilia that pervades the U.S. publishing industry, all eyes will be on what happens next for the publisher of magazines such as British Vogue and GQ.

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Condé Nast Britain lost £13.6 million in 2017 ($17.3 million at today’s exchange rate) on sales of £113 million, compared with a profit of £4.3 million in 2016.

The results indicate Condé Nast International isn’t any more immune to negative sales trends than its sister company in the United States, which was said to have lost more than $120 million in 2017. The migration of audiences to digital media has led to a shift in ad dollars to companies like Facebook and Google.

In November, Condé Nast announced plans to merge its international and U.S. businesses. Its board ousted its U.S. chief executive and started a search for a global leader for the company.

The international operations have made money since 1995 and may still report a profit next month despite the U.K. losses.

Condé Nast Britain would have made a profit of £4 million in 2017, but the company reported extraordinary items, including restructurings and a one-time payment to its pension plan.

The restructurings included job cuts and the consolidation of all operations into Vogue House in London. Edward Enninful, the former creative and fashion director of W magazine, replaced Alexandra Shulman as editor-in-chief of British Vogue. The magazine’s longtime fashion director Lucinda Chambers also was cut.

The U.K. edition of Glamour in 2017 cut the frequency of its print version to twice a year. The U.S. edition of the fashion magazine stopped publishing a regular print version last year.

Still, the company needs to restore top-line growth, especially when the economy is still expanding.

Almost every one of Condé Nast’s U.K. titles lost circulation in 2017, except for Condé Nast Traveller, which gained 2,000 readers to reach 80,000.

The company said it continues to invest in digital media, a wise move considering the prevailing trends. Hiring a new CEO with a plan for digital growth — one who can get along with Jonathan and Steven Newhouse in running the company — will be the next key step.

1 comment about "Conde Nast's UK Slump Shows Pressing Need For New CEO".
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  1. Walter Sabo from SABO media, January 7, 2019 at 9:10 a.m.

    THE NEWHOUSE'S ARE GREAT TO GET ALONG WITH. THEY ARE BRILLIANT.

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