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Its mea culpa aside, Conde Nast Publications is prepared to cancel its corporate American Express accounts if AmEx makes good on a threat to pull ads from the publisher's titles.

The prospect of lost business on both sides is the latest escalation of a long-simmering feud between Travel & Leisure parent American Express Publishing and Conde Nast, publisher of Conde Nast Traveler.

AmEx Publishing this week is expected to release a statement saying it is not satisfied by a late April letter from Conde Nast President Steve Florio apologizing for the role his executives may have played in spreading a rumor that American Express Publishing is for sale.


Mr. Florio sent the letter to AmEx attorneys and said he considers the case closed: "This was unfortunate, I regretted it and I've taken appropriate action."

But AmEx wants more. In its statement, AmEx said, "We assume Mr. Florio will take appropriate action regarding those individuals involved in the deceptive practices and we will monitor the situation closely going forward."

Executives close to the controversy said AmEx Publishing is still hotly debating whether to retaliate further by pulling AmEx card ads from Conde Nast titles.

American Express places about $1 million in ads in Conde Nast titles annually, but AmEx could also influence several million dollars in co-op ads.

If the ads are pulled, Conde Nast is preparing to cancel its American Express corporate cards. The company charges an estimated $12 million a year on AmEx cards, executives said.

AmEx Publishing claims persistent rumors that the company is for sale were being spread by Conde Nast executives who knew them to be false.

"This business is not and has not been for sale in the entire three years that Time Inc. has managed it," said AmEx Publishing President-CEO Dan Brewster.

AmEx Publishing has been managed by Time Inc. since March 1993. AmEx retains ownership, and profits are shared.


Executives estimate the group still lags general industry profitability levels but that profits have improved under Time Inc.-moving from just over $1 million in 1994 to $5 million to $10 million last year, on revenues of about $120 million.

Last year, Conde Nast Traveler finished ahead of Travel & Leisure in ad pages for the first time. Through March, Conde Nast Traveler ad pages rose 1.6% to 270.8, while T&L was up 12.1% to 285.9 pages.

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