There’s More to Come at Condé Nast, but How Much?

ruth reichl2 getty Theres More to Come at Condé Nast, but How Much?The 180 bodies lost this week at Condé Nast, in the wake of the execution of Gourmet, Cookie and two bridal magazines, comprise the greater part of the damage that we’re going to see out of 4 Times Square, CEO Chuck Townsend told The Observer.

“This was the big news,” said Mr. Townsend. “I don’t think it will be substantially more. It’ll be a trickle.”

But what is meant by “trickle” isn’t totally clear. Editors and publishers are still fidgeting with layoff numbers at their respective books—one day they expect to lay off five editorial staffers, the next day it could be 10—and those cuts are expected to begin next week.

Sources at different magazines within Condé Nast cautioned that the scale is still sliding—the total number of layoffs from each surviving magazine could reach somewhere close to 180, or it could wind up being far less.

>>READ THE BACK STORY ON THE END OF A CONDE NAST ERA

(Things don’t seem to be much clearer in the executive suite at Condé Nast, either. Mr. Townsend said in an interview that yesterday’s job cuts would represent 80 percent of the company’s total layoff figure. But a spokeswoman later backed off that remark and said, “the majority of the layoffs would be taking place this week.”).

Either way, the McKinsey-inspired changes finally began at Condé Nast this week with a sobering start: four magazines eliminated, including the big surprise that Gourmet was getting the ax over Bon Appetit. 

The Gourmet versus Bon Appetit parlor game began inside 4 Times Square 10 months ago. In January, the word “redundancy” became popular among executives and publishers, who began to frame a battle of two struggling food titles fighting for diminishing ads.

But the bake-off seemed to have a clear winner: Gourmet, by a mile.

“As companies across all industries streamline redundancies, you’ve got Bon Ap and Gourmet, and which has the stronger name? Gourmet, clearly,” a Condé Nast publisher told The Observer in the beginning of the year. “As a brand you want Gourmet. It’s got Ruth Reichl, it’s edited in New York. Bon Ap is in L.A.—it’s never really reflected the Condé Nast culture.”

For a company that favors sentimentality so much—The New Yorker was exempt from meeting with McKinsey and from mandated budget cuts because Si Newhouse treasures it, not because of superior business practices—the choice seemed obvious.

And then, suddenly, Mr. Newhouse decided otherwise. Mr. Townsend said he went to Mr. Newhouse at the end of last week with four magazines to cut, and Mr. Newhouse gave him a green light.

Instead of sentimentality, Mr. Newhouse seemed to favor some cold, hard Darwinism.

Mr. Townsend candidly said something that none of us ever knew: Gourmet was a bad business, and Bon Appetit was a better one. The luxury ad market Gourmet tied itself to had dried up, and Bon Appetit, which charged smaller rates and had a bigger circulation, was still pulling in money. 

In many ways, the writing was on the wall for Gourmet, particularly after McKinsey started nosing around in Condé’s spreadsheets. As The Observer reported a few weeks ago, McKinsey consultants were particularly interested in the breakdown between ad and edit pages. Gourmet’s ratio was miserable. Ruth Reichl’s title had only 40 ad pages against 74 editorial pages in September, the issue that is supposed to bring home big numbers (compare that to Vogue, which fell tremendously this past September, yet still had 427 ad pages versus 157 editorial pages in September). As McKinsey prepared recommendation packets for each book, and as COO John Bellando and editorial director Tom Wallace gave their editors and publishers pep talks, the ad/edit ratio kept popping up in conversations.

Cookie’s crumble was surprising, too, if to a lesser extent—it was one of the few magazines that saw an increase in ad pages last year at Condé Nast.

“I don’t think anyone can be shocked by any closing, but I think we were feeling pretty optimistic just because we had a lot of growth and we were looking at a lot of momentum in the upcoming year,” said Pilar Guzmán, the young and popular editor of Cookie, as she was packing up her office. “I started hearing a couple things very recently but rumors come and go and there are a number of magazines that have been whispered about for a decade and then it never comes to pass.”

Ms. Guzmán said she was in the midst of trimming her budget—by 20 percent—when Mr. Wallace emailed her Monday morning and asked for a meeting.

“It was quick and straightforward and it didn’t require that much explanation. The reasons are obvious,” she said.

The eliminations of Modern Bride and Elegant Bride were unsurprising. The two magazines shared staffs, and all the bridal magazines—including the surviving Brides—trade in far lower-end advertising than most Condé Nast titles. In other words: They weren’t particularly Condé-Nasty.

As for what’s next, each book has yet to declare its final budget and layoff numbers. Also still to be determined is how many titles will reduce their frequency (Mr. Townsend said it would be two to four). But as these long-awaited decisions finally come to fruition, Mr. Townsend said, quite proudly, his company is beginning to look a little more like Hearst and Time Inc.

“I think we’re coming down in our perk-distribution and looking more like others,” said Mr. Townsend. “I’m not saying that our editors can’t fly first class; I’m saying you choose how to spend your money. If the most efficient way to do business is to take a Town Car, then for Christ sake, I’m not going to insist people take subways and destroy their approach to business. I’m just asking people to be sensible.”

jkoblin@observer.com

More on Conde Nast from John Koblin:

Roughly 180 Laid Off at Conde Nast; Pilar Guzman Is Out

Details Publisher Gets Fired

The Gilded Age of Conde Nast Is Over