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Condé and McKinsey

Condé Nast has long had a reputation for being more than just a company: They're a publisher. Some of their titles make money, of course. But many, like The New Yorker and Gourmet, don't. They protected them anyway.

On Monday, they announced that they're shuttering Gourmet. But not totally. They'll keep its cookbook and television presence. They're just killing off the unprofitable magazine. It's a ruthless move, as it means Gourmet can't be resuscitated by another publisher, or allowed to live in a more frugal fashion. They didn't so much terminate the brand as cannibalize it. “In the economics of the ’80s, ’90s and early 2000s, this would be a business decision balanced by the cultural reticence to part with iconic brands,” Charles H. Townsend, Condé Nast’s chief executive, told the New York Times. "This economy is a completely different bag.”

Apparently. Adding to the stink of the move, this was all premised -- and thus blamed on -- a report from the McKinsey consulting firm. I've no doubt that McKinsey's report correctly noted Gourmet's poor performance. But Condé knew about that performance already. It looks, rather, like they paid McKinsey a huge sum of money in order to hide behind their report's conclusion. That probably made this move psychologically easier on Condé's executives, and it probably helped with the media side ("what can we do? This is practically science!"), but that's money that could have gone toward jobs and severance packages instead.

By Ezra Klein  |  October 6, 2009; 6:15 PM ET
Categories:  Journalism  
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Comments

What I really don't understand about Conde Nast is their legendary expense accounts - were those really necessary to retain the people they wanted? Did they serve any purpose at all, except to inspire legends?

Posted by: WarrenTerra | October 6, 2009 6:30 PM | Report abuse

The money is still going to jobs if it's going to jobs at McKinsey. Granted, the jobs aren't as cool.

Posted by: tomtildrum | October 6, 2009 6:41 PM | Report abuse

You've never heard the expression "a consultant is someone you pay to take your watch, look at it, and tell you what time it is"? What do you think all those panels and commissions the government has are for, if not to give people political cover to do things?

Posted by: NicholasBeaudrot | October 6, 2009 6:47 PM | Report abuse

To be fair to The New Yorker, they have not been content to lose money, at least since Remnick took over, in 1998. He obviously burnished its profile with excellent reportage and a truckload of awards, but with publisher David Carey, he also nearly doubled the mag's circulation and brought in many millions more in ads than Tina did. By the end of 2005, The New Yorker was back in the black, after close to 20 years in the red. It probably would still be turning a profit now, if it weren't for the recession's huge hit on 2008 ad pages, led by the pullout of financial firms.

Posted by: andrewlong | October 7, 2009 12:18 AM | Report abuse

p.s.: can you do anything about the ridiculous indignity of my having to watch an ad while *previewing* my comment? kthanxbai.

Posted by: andrewlong | October 7, 2009 12:20 AM | Report abuse

We need to get use to this. Like the newspaper business, the magazine business will be dying.

In Ezra's lifetime, Readers Digets will likely stop printing. If it continues to exist, it will be in some other format. That might mean less on a personal level to Ezra than Gourmet because he probably doesn't read Readers Digets. But from an iconic standpoint and in terms of how massive the circulation was at its peak, it probably was unfathomable to think that RD could stop printing. In contrast, magazines like Gourmet have shuttered ofter over the years. Heck, Life shuttered several times.

John

Posted by: toshiaki | October 7, 2009 9:16 AM | Report abuse

Wait, Gourmet is an "iconic brand?"
It's possible I'm ignorant, and lord knows I'm neither a heavy magazine reader (and why would I ever want to go to a magazine for recipes?) nor a gourmand, but I would hope that, if it were an iconic brand, I'd at least have heard of it.

The New Yorker it is not.

Posted by: adamiani | October 7, 2009 10:33 AM | Report abuse

i am puzzled by your continuing interest in the conde mast and "gourmet" magazine

there have been systematic cuts in employees, wages and benefits for decades throughout the united states

the "profitability" mantra began in the 80s

no industry has been spared

it has happened to people working in manufacturing, services, education, social services, and government

textiles, apparel, steel, banking, printing, construction, automobiles,

just about everywhere

now newspapers and magazines are subjected to "saving costs" for the sake of "profitability"

not a new story

a new group of people affected by "cost savings"

not a conde mast "gourmet magazine story

a story everyone knows about

a story about the lives of millions of people

a story no one is writing about

what makes "gourmet" magazine so unique

Posted by: jamesoneill | October 7, 2009 10:36 AM | Report abuse

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