The troubled title is more than $10 million in debt. The chief financial officer was ousted late last month, and most of the ad sales staff is gone. There are serious questions about whether the 107-year-old publication will survive the next few months.
Owner Peter Morris, a Chicago real estate developer, is scrambling to save the New York-based magazine he bought in 1995 for $16 million, when it was still profitable.
Mr. Morris is trying desperately to convince a "strategic partner" to deliver a cash infusion. He says a deal is in the works. The landowner is even planning to sell some of his holdings to stave off bankruptcy.
"I'm willing to walk on glass to get things done," said the novice publisher.
Ironically, Mr. Morris' woes come at a time when the market has never been hotter. With small business thriving, titles like Fast Company and Inc. are capitalizing on the country's growing entrepreneurial spirit. Advertising revenue in the magazine industry has been setting records.
Mr. Morris and Success have failed to participate.
"There was a huge boom in the '90s and Success missed the mark," said Rieva Lesonsky, editorial director of rival Entrepreneur. "How can it catch up now?"
Success' ad revenue for the first quarter of 1999 dropped 21% to $3.7 million. During the same period, Inc.'s ad revenue grew 21% to $19 million, and Entrepreneur saw a 7% increase to $13 million.
Success' troubles began when Mr. Morris, new to the publishing industry, decided to take Success in a new direction, eschewing its traditional service journalism for a glossier lifestyle approach. The plan backfired.
NEW EDITOR OUSTED
Shortly after a redesign last October, led by newly installed Editor in Chief Steven Slon, Mr. Morris dumped the former Men's Health editor, taking over that position himself.
He also ditched Publisher Peter Johnsmeyer, a former Reed Elsevier executive he had hired, and replaced him with John Spoelstra, a National Basketball Association executive with no publishing experience.
With creditors ranging from free-lance writers to big printing companies, Mr. Morris was forced to suspend publication of spinoff title Working at Home, which was set to increase from a quarterly to a bimonthly schedule this year.
Mr. Morris said everyone will eventually get paid. He's worked out a payment plan with Brown Printing; it has agreed to continue producing the magazine.
REAL ESTATE BUST
The charismatic businessman is no stranger to failed enterprises. He watched his high-flying VMS Realty Partners crumble in the real estate bust of the late '80s. He plowed through a personal fortune of more than $400 million, ending up with a negative net worth.
Mr. Morris slowly rebuilt his riches, though much of his wealth is now tied up in Success. While he's still optimistic about his prospects, industry insiders believe that the title is doomed.
"He'd be crazy to save it," said Gary Mirkin, Inc.'s publisher. "He'll need a ton of money to revitalize it."