Conde Nast's Townsend on Why Gourmet Was Shut Down
Food Mag Was Sentimental Favorite but Sibling Title Bon Appetit Is '800-Pound Gorilla'
NEW YORK (AdAge.com) -- Not long after Conde Nast shut down Gourmet, Cookie and two wedding magazines on today, we asked its president-CEO, Charles H. Townsend, how much of a role visiting McKinsey consultants played, whether this decision means the company is veering from elite magazines toward mass titles, what's happened to magazine launches this decade -- and when this whole McKinsey process will finally finish.
Advertising Age: How important was McKinsey in the decision to close these four magazines?
Mr. Townsend: This was our own process. McKinsey is working on our ongoing businesses to provide us with templates to improve their financial health. But I wouldn't have them spend a great deal of time on businesses to be discontinued. We made these decisions based on our assessments of the financial health and the viability of one title vs. another.
In the epicurean situation the sentimental favorite might be Gourmet, but the big-business 800-pound gorilla is Bon Appetit. The same with Brides: Taking it to 12 times from six times [while closing Elegant Bride and Modern Bride] is how you practice that big business.
Advertising Age: McKinsey's been looking at Conde for months, though; When did you know today's shut-down titles were businesses to be discontinued?
Mr. Townsend: We made the decision late last week. They looked at all of our businesses. They focused on the list of businesses with us that we believe have very strong bright and vibrant futures.
Advertising Age: So did McKinsey's focus on other businesses inform your decision to close these?
Mr. Townsend: It was somewhat confirmation of the obvious. They know this company very, very well. They know how sentimental we are, how reticent we are to discontinue businesses like Gourmet. But they certainly didn't twist our arms. They simply confirmed, unfortunately, the obvious.
Advertising Age: Is it correct to infer Gourmet was losing money?
Mr. Townsend: It was operating as a burden. In the middle of this decade it was a profitable business, but having two of those businesses did not help the situation. And the dominant business -- particularly with the consumer -- is Bon Appetit, which emerged as the considerably stronger business.
Advertising Age: A Conde Nast employee asked me today whether choosing Gourmet over Bon Appetit signals the future of Conde Nast. Do you shut down the title that's beautiful and smart with good writing, the employee asked, and go for the title with recipes and pictures of cheeseburgers? Do you go with mass over the esteemed, narrower title?
Mr. Townsend: That's not Conde Nast. I think that Bon Appetit certainly has broader appeal but I would by no means characterize it as a mass magazine. It's still a high-end magazine. You look at its demography, its price points, the advertising it carries, you look at everything about it, it's a Conde Nast magazine.
So the answer to that query is no, that's wrong. We are content with this company's position relatively to the other big players. We're not abandoning our position at all.
Advertising Age: Are there any more shutdowns to come?
Mr. Townsend: No, zero.
Advertising Age: Is the McKinsey process complete at Conde Nast, and if not, what's still coming?
Mr. Townsend: We're waiting for the response from the individual titles.
McKinsey is going to look over our shoulder as we sort out the plans that are presented to us that have had the opportunity to deal with the menu of suggested financial controls, expense controls.
I would say that we're done in a couple of weeks, with the 2010 budgets. Their support of this process has invaluable.
Advertising Age: There were recent years in which Conde introduced lots of new titles: Lucky in 2000, Cargo in 2004, Domino and Cookie in 2005, Men's Vogue in 2006 and Conde Nast Portfolio in 2007. Of those launches, now only Lucky survives. Have conditions for big magazine launches changed?
Mr. Townsend: The conditions changed for almost limitless investment in supporting launches in the period 2004, 2005, 2006 and 2007. And they're facing a very, very challenging market in 2008, 2009 and 2010.
Absolutely the conditions are diametrically changed. If titles aren't well-established, haven't qualified as a core book, they're under huge pressure.
Ad Age: Are those changes recessionary or something more lasting?
Mr. Townsend: I believe it's recessionary. Unlike previous recessions this is a very, very long-duration, slow-to-recover economic cycle. It makes investment properties very challenging to support.
Advertising Age: But big launches will be easier again after the recession?
Mr. Townsend: Well let's hope. I have no more vision than anybody I've read.
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Gremolata.com, SeriousEats.com, Gothamist.com, and Cakehead.com are all great examples of sites where the news is to the point and the recipes (in the case of Gremolata) are simple and idiot-proof. No fuss, no snobbery, just celebrating good food and drink. That is where Gourmet totaly missed the mark recently.
I think Conde Nast should be looking at these players and asking them for advice.
http://www.searchtactix.com
In terms of wisdom, foresight, and insight, this has New Coke written all over it.
Bon Appétit is a great title targeting the home "chef", but these two should have never been in a competition. It was a tragic mistake to shutdown Gourmet. It is a wasteful loss of a unique avenue into a valuable demographic. It clearly should have been sold not closed if it didn't fit within Conde Nast's future plans.
Cant wait to see what Pilar does next
If management is allowing McKinsey to "be a part of our company and decide financials" the management should be changed. They obviously don't know how to run a business. The comments stated above about how they operate are absolutely true. I too have been a part of that same scenario: stealing files, claiming work they did not do, determining decisions before they have truly analysed a business and a market, wreaking havoc on a company and then walking away....literally wrecking a company and being paid for it.....really sad....Gourmet should have been reduced to a quarterly, refocused on the right target market and relaunched.....tsk tsk.....
Where I think Gourmet may have missed the boat was in not figuring out how to create an "upper crust" -- a membership tier to Bon Appetit. American Express, which started with the membership as business model, can branch into lifestyle. Why can't the master of lifestyle branch into membership? Discounts on spices, cooking classes, food tourism, Reserve wine tastings, cigars, even seed catalogs.
Gourmet describes a person. There's room here for -- at the very least -- a compelling community online.
Sure the media universe is changing, but content is still king. Gourmet's writers and editors produced great content. Too bad Conde didn't explore alternatives before pulling the plug.
As a marketer, I believe they had tremendous emotional equity in the brand. I would hope that someone figures out a way for it to live on.