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Randy Jones, CEO of Capital Publishing, has cut costs 10% to 15% since recapitalizing the $60 million company with funding from Greenwich Street Partners. Yet he still found room in his pared budget to hire Joe Armstrong as senior VP-group publisher.

Mr. Armstrong left Meigher Communications acrimoniously after five years as publishing director. Now he has joined another start-up that is looking to manage its costs tightly as it prepares to expand fledgling titles.

In his new role, Mr. Armstrong's mandate is to double the ad revenues of Capital's four titles-Worth, Civilization, American Benefactor and the soon-to-be-launched Equity.

Publishers will report to Mr. Armstrong, who will also be in charge of acquisitions and launches.

"My mandate is to double the size of the company" within three to five years, Mr. Jones said.

Capital Publishing hopes to boost revenues to $150 million, a size that would allow Mr. Jones and partners eventually to take the company public.

The industry will be watching closely. Many observers had a chance to review Capital's financials last year when former owner Fidelity Capital quietly offered it up for sale. At the same time, Mr. Jones started shopping for partners to help him buy the company from Fidelity.

Publishing executives with knowledge of Capital's financial statement before the recapitalization said the company had extremely high overhead costs, and they did not believe just getting costs in line would be enough to pull it into profitability this year.

Capital's plan under Mr. Jones is to grow mainly through acquisitions rather than starting new titles (with the exception of Equity). He also expects to boost ad revenue from existing titles.

Through Greenwich Street Partners, Mr. Jones said he has access to $100 million in financing for acquisitions.

To fuel ad growth, Worth will launch a supplement issue in 1999 focusing on men's fashion, called Suitable Investment.

Worth was down 19.4% in ad pages, to 394.11, for January through August compared with the same period in 1997, according to Publishers Information Bureau figures.

Civilization, however, was up 52.5% to 155.83 ad pages. American Benefactor was down 34.1% to 62.83 pages.

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