Conde Nast Spins Off Lucky Magazine but Keeps Majority Stake
Conde Nast ended years of speculation on Monday about whether it would shutter Lucky or continue to print the sputtering magazine by instead spinning off Lucky into a separate company called The Lucky Group.
The new company is a joint venture between Conde Nast and BeachMint, an e-commerce company co-founded by Josh Berman, who also co-founded MySpace. Mr. Berman will be CEO of The Lucky Group. The company's board of directors will include a representative from Conde Nast, which is the majority shareholder, according to a Conde Nast employee.
The Lucky Group will have about 180 employees, with an office in Santa Monica, Calif., where BeachMint is headquartered, and an office in New York that will be separate from Conde Nast, according to Mr. Berman. No one from Lucky will be laid off, he added.
Eva Chen, editor-in-chief of Lucky magazine, will be chief creative officer of the new company and continue to oversee Lucky's editorial efforts. Gillian Gorman Round, the magazine's general manager, will be the new company's president, responsible for all revenue and marketing. Anna Wintour, Vogue editor and Conde Nast artistic director, will be an advisor.
Lucky magazine will continue to publish in print, Mr. Berman said. "We're really bullish on the plan," he said, referring to the print magazine, which he said the company will look to grow.
"What attracted us to Conde Nast and Lucky is they're a heritage brand with incredible editors and content," he explained. The two companies had been in talks for several months, he added.
During that time, rumors about Lucky's closure intensified. In April, the New York Post ran an item on the topic, prompting Conde Nast executives to send three separate memos refuting the claim, according to Women's Wear Daily.
In May 2013, Lucky introduced a redesign that was partly led by Ms. Wintour, but also hinted at ambitious plans for an e-commerce platform that did not come to fruition. The redesign did little to stem the magazine's print struggles. Through August of this year, print ad pages were down 7%, according to Media Industry Newsletter.
The new company's aim, however, is all about e-commerce. BeachMint, which was founded in 2010, has received $75 million in funding, Mr. Berman said. It features six distinct e-commerce sites. Lucky will provide content to BeachMint, which Mr. Berman said is a key to success for e-commerce because it leads to greater discovery among consumers and drives people to the site.
"We studied companies like Net-A-Porter and Asos and they've all launched publications," he said. "We saw the industry shifting -- you have to have commerce and content in place."
In an email to marketers on Monday, Ms. Round said the formation of The Lucky Group means it can "accelerate the content to commerce journey."
"In early 2015," she continued later in the email, "we plan to debut a new e-commerce platform which will feature our distinctive voice and aesthetic, underpinned by BeachMint's expert technology, customer service and commerce operations."
"We are incredibly excited about the opportunity this brings to our consumers and advertising partners, and we look forward to sharing more details as we embark on this new path."