LONDON, United Kingdom — Condé Nast, the privately held publisher of Vogue, GQ, Vanity Fair and other titles, is facing challenges in the US and Western Europe, but Asia is a bright spot.
According to a new earnings report, Condé Nast’s business in the UK, France, Italy, Germany and Spain registered a combined turnover of £373 million (about $493 million) in 2017, down 7 percent from the year before. The decline was steepest in the UK and France — home to titles such as British Vogue and Vogue Paris — and Italy, which generated the most revenue in 2017, also declined. The Western European part of Condé Nast’s business lost £27.4 million (about $36 million) that year, which it attributed to one-time costs related to a restructuring of the business that included layoffs and office moves. Excluding those expenses, it recorded a £3.2 million (about $4.2 million) profit.
The international arm of the publisher, which has long stated that it is profitable and healthy despite decreasing print advertising dollars and newsstand sales, is merging with its US counterpart this year. The unified company hopes to better compete for advertising dollars on a global scale, and share more resources internally. The US unit lost $120 million in 2017, due to growing investment in digital publishing and waning print advertising revenue.
Outside the US and Europe, Condé Nast’s prospects are looking up. Condé Nast International said in a separate statement shared with BoF that, taking into account all its international markets, the business registered an underlying profit of $50 million in 2017 (also excluding exceptional items). The fastest-growing countries were China followed by Taiwan, India, Russia, Japan and Spain, although the publisher did not give revenue or growth figures for its overall performance.
The magazine publisher has struggled to adapt to the decline of print advertising budgets and the rise of digital media.
In the last two years, Condé Nast International has launched more titles in new territories, including Vogue Poland, Vogue Czechoslovakia, Vogue Arabia, GQ Middle East and Vogue Hong Kong. Vogue Greece is also forthcoming.
“Our digital and organisational investments will translate into better financial performance and enable new business growth,” said the publisher in a statement about the 2017 results.
That year was one of widespread change for Condé Nast International. Under chairman and chief executive Jonathan Newhouse, the publisher saw a series of leadership switches, most notably the appointment of president Wolfgang Blau, who spearheaded a new approach to the portfolio of titles that prioritised brands over countries with more support coming out of London. In 2017, he launched Vogue International, a centralised editorial hub to support the fashion brand across markets. It was also the year Edward Enninful was named editor-in-chief of British Vogue, Emanuele Farneti was named editor-in-chief of Vogue Italia and Fedele Usai was named chief executive of Condé Nast Italy.
Condé Nast is currently searching for a new global chief executive, following the announcement last year that the publisher will merge its US and International businesses, previously separate entities within the Newhouse family’s Advance Publications. Both in the US and abroad, the magazine publisher has struggled to adapt to the decline of print advertising budgets and the rise of digital media, which has required rampant cuts and costly investments in technology and data capabilities. The US publisher has said it will put all its titles behind some kind of paywall by the end of 2019.
Exactly how the merger will impact the once very separate companies is still unclear — and will likely be up to the yet-to-be-named global chief executive.
In other news, Apple confirmed on Monday that Condé Nast signed on to be a part of Apple's new monthly paid subscription service, Apple News+, which the technology company developed after acquiring magazine subscription app Texture in 2018. According to the Wall Street Journal, Apple plans to take 50 percent of subscription revenue generated through the service, and not share consumer data with publishers. The Apple service will be available in the US and Canada.