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Condé Nast’s UK Titles Swing to a Loss

The publisher of British editions of Vogue, GQ and other magazines reported a $17 million loss in 2017, offering a glimpse into the challenges faced by Condé Nast as it prepares to merge its US and international units.
British Vogue cover 2019 | Source: Courtesy
  • Chantal Fernandez

LONDON, United Kingdom — Condé Nast Britain, which includes the UK editions of Vogue, GQ and Glamour, reported declining revenue and a £13.6 million (about $17 million) loss in 2017, demonstrating that the challenges facing the print publisher extend beyond the United States.

The British business is part of the London-based publisher Condé Nast International, which oversees titles outside the US, and which executives have described as consistently profitable. Both the International arm and the US business, known simply as Condé Nast, are owned by the Newhouse family's Advance Publications. In November, they announced plans to merge the two units as part of a broader plan to reverse falling revenue and mounting losses, particularly at US titles.

The publisher's annual report attributed most of the British division’s 2017 loss to “exceptional items” related to staff reorganisation and investments in a pension plan and digital platforms.

"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," said a representative for Condé Nast Britain.

In 2017, Condé Nast Britain generated £113.5 million ($143 million) in revenue, down 6.6 percent from the prior year. In 2016, it registered a profit of £4.3 million (about $5.5 million). UK staff were reduced by 8 percent to 610 employees in 2017, though wages and salaries increased 11 percent to £39.8 million (about $50 million).

The year was notable for the UK business: Edward Enninful was named editor-in-chief of British Vogue in April 2017 with much fanfare and anticipation of the new vision he would bring to the magazine, which has been lauded for its embrace of diversity. The response to his issues, which debuted at the end of 2017, has been so positive that some are wondering if he is the likely successor to American Vogue's editor-in-chief Anna Wintour.

Condé Nast International is expected to file a 2017 report in the coming weeks with the results of the business in the United Kingdom, France, Italy, Germany and Spain. In 2016, that segment operated at a loss as well (down £6.5 million, about $8.2 million) but the publisher has maintained that the global company, including operations in China and other regions, is profitable.

In 2017, chairman and chief executive Jonathan Newhouse promoted Wolfgang Blau to president of Condé Nast International, kicking off a new approach to the publisher's portfolio centered around brands instead of countries. Before, many of Condé Nast International's regions operated quasi-independently, led by country presidents overseeing multiple brands and influential editors-in-chief such as Vogue Italia's Franca Sozzani, who died at the end of 2016.

In 2017, Condé Nast International started providing more central support coming out of London, and increased its focus on the publisher’s most valuable asset, Vogue, launching an international hub for the brand that supports 25 editions around the world (except the United States) with content production, images and other services.

In the last two years, Condé Nast International has also launched new regional editions of its global brands, including Vogue Poland, Vogue Czechoslovakia, Vogue Arabia and GQ Middle East. Vogue Greece and Vogue Hong Kong are planned for early 2019.

The company has also seen a change in leadership, both at its headquarters in London and at the regional level through country presidents and editors-in-chief. In 2017, Blau succeeded longtime president Nicholas Coleridge, who was also the managing director of Condé Nast Britain; Albert Read was named managing director of Condé Nast Britain; Jamie Jouning was promoted to chief revenue officer of Condé Nast International; Vanessa Kingori became the publisher of British Vogue; Emanuele Farneti was named editor-in-chief of Vogue Italia and L'Uomo Vogue, among many other appointments.

In an interview with the New York Times last summer, Blau spoke about some of the changes at Condé Nast International since his arrival as president, describing its next phase as one focused on "extreme centralisation" even before plans for the global merger were announced.

Advance Publications is currently looking for a new global CEO to oversee the newly integrated businesses. Condé Nast in the US lost a reported $120 million in 2017 and announced a plan under the soon-to-be exiting chief executive Bob Sauerberg to return to profitability by 2020. In 2015, Sauerberg put the publisher's revenue at more than $1 billion, according to the Wall Street Journal, but it has decreased since.

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