The jury's still out as Hachette chief finishes first year

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One year after taking control of Hachette Filipacchi Magazines, Jack Kliger still faces serious hurdles.

The high point of Mr. Kliger's tenure to date has been his decision to save George after founder John F. Kennedy Jr. died in a plane crash in July. But George is far from flourishing, and Mr. Kliger has done little else to distinguish himself as a dynamic force at the $600 million company.

Advertising pages for Hachette's 25 titles, which include household names such as Elle, Car & Driver and Woman's Day, have slipped 4% for the first quarter, according to Publishers Information Bureau, while competitors Time Inc., Conde Nast and Hearst Corp. are showing double-digit gains in a robust economy.


Mr. Kliger has yet to launch any additional titles, make acquisitions or declare substantial partnerships in the Internet world, while newer chiefs at Primedia and Ziff Davis Publishing have been far more active.

"He hasn't articulated his new vision of Hachette to the outside world," said David Verklin, CEO of media buying agency Carat North America.


In an interview, Mr. Kliger said he's been busy housecleaning to strengthen Hachette's base. Over the past year, he restructured his management team, bringing in new blood and promoting from within. He shored up some of the biggest titles, such as Elle and Woman's Day, building circulation while closing weaklings such as Mirabella. And he breathed new life into George, with the whole world watching.

Mr. Kliger, 52, joined Hachette as president-CEO in May 1999 after the company's exhaustive search to find a replacement for David Pecker. Mr. Pecker built the company into an American power for French owner Lagardere Group but left for an equity position in American Media, the publisher of Star and the National Enquirer.


The two leaders couldn't be more different. Mr. Pecker is an entrepreneurial risk-taker who bets on struggling titles and long shots such as Mirabella, cuts costs to the bone and wrings out profits.

Mr. Kliger, a silver-haired executive with a strong jaw and paternal demeanor, is far more deliberate. He's willing to invest more in infrastructure -- such as marketing, circulation and editorial content -- expecting the effort to pay off in the long run. Though he doesn't have the same inspired sense of leadership, insiders said, he is well respected.

"David's reaction to a deal is, `Let's do it,' " said Elle Publisher Carl Portale. "Jack covers all the bases first."

Many industry observers said they believe Mr. Kliger is now "mopping up" at Hachette, where Mr. Pecker's relentless focus on cutting costs and discounting advertising pages has taken its toll. For example, Mr. Kliger is injecting discipline into his sales force and weaning advertisers off those steep discounts, which he said explains the slump in ad pages. He added the company's profits have improved.

However, his accomplishments to date have been routine.

"In a year's time, you would have expected to see something done, even to the point of a major ad campaign, to put your own mark on the company," said one publishing executive who declined to speak for attribution.


Even George is a mixed achievement. Circulation has soared 25% since Mr. Kennedy's death, and renewal rates for subscriptions are strong at 60%. But advertisers have yet to climb aboard the relaunch. Pages through April are running 70% below last year's poor showing; revenue is down 63%, to $1.9 million, though that's partly because there have been two fewer issues this year.

"The jury's still out," Mr. Verklin said.

Mr. Kliger said he expects George's turnaround to come in 2001, and added the company is firmly committed to the title.

The next few months should see gains in other Hachette publications. In September, Elle will increase its rate base from 900,000 to 950,000. Mr. Kliger said he hopes to build circulation at other titles through a long overdue direct-mail campaign.

Road & Track and Car & Driver, two of the company's biggest moneymakers, are in the process of ramping up their Web operations. Premiere, which saw ad pages decline steeply in the first four months of the year, has added a style editor and will introduce more fashion and beauty coverage in the fall in an effort to lure advertisers in those categories.


Mr. Kliger has restructured Hachette's upper management, bringing in a senior VP of new media and creating corporate marketing, branding and group publisher positions. He has replaced several publishers and this week will announce that Jeffrey Foley, ad director at The New Yorker, will become publisher at Travel Holiday.

Mr. Kliger said observers will see a "much more aggressive stance going forward." The company will launch a strong corporate marketing campaign, there will be more Web and multimedia developments -- a mandate from parent Lagardere -- and in June the custom publishing division will announce a new partnership.

Mr. Kliger also said he will compete for the Times Mirror group of magazines, which includes Golf Digest, if they go on the block after that company completes its merger with Tribune Co. Other likely bidders include Mr. Pecker's American Media, Emap USA and Gruner & Jahr USA Publishing.

"My first year was designed to get our house in order," Mr. Kliger said, "then we'll move forward on top of a solid foundation."

Ms. Block is a reporter at Crain's New York Business

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