Evening Standard: Media - Hachette vs Emap over Elle
By David Rowan
IN the glossy world of women's magazines, it is the bitter divorce that everyone is bitching about. After a beautiful 10-year relationship, the couple behind Elle magazine are separating amid angry recriminations, a nasty custody battle and the curious satisfaction of a vengeful ex. It is a riveting tale of high-fashion love gone sour that could easily make the cover of a women's magazine - although you will not be reading it in any of those published by Emap or Hachette.
For it is these two giants of the publishing world that are currently at war over the future of their joint venture, the UK edition of Elle. Alongside Vogue and Marie Claire, Elle has long been one of fashion journalism's biggest success stories. Since Emap became an equal partner in the magazine with the French publishing house Hachette a decade ago, profits have rolled in, new titles such as Elle Girl have been born and - at least to the readers of "the world's biggest-selling fashion magazine" - the relationship has generated only beauty and health. But last week, Emap announced that it was seeking an "amicable and efficient break-up" for the deal. It would be giving up its stake in Elle, its flagship women's monthly, and would develop its own rival publication.
The crisis was triggered by Hachette's purchase of another publisher, Attic Futura, which competes with Emap over some of its younger women's titles. But those familiar with the break-up suggest that the split has been engineered by Emap's former chief executive, Kevin Hand, who resigned last year after leading the company into a disastrous foray into buying a group of American magazines. His departure earned Hand a "compensation package" of £662,396, but that, it seems, was not enough. So when Hand found a new job last January as special adviser to Hachette's president, Gerald de Roquemaurel, it is said that he encouraged the Attic Futura purchase in order to poison the marriage.
Hachette denies he played a role in the purchase. "The gut feeling within the industry is that Kevin has been angling to do this for some time, and now he's getting his own back," according to one well-placed insider. "Kevin was ousted by Emap, and he knows that Elle is very important to it. So he encouraged Hachette to buy Attic Futura purely as a place to publish Elle."
It is difficult to overestimate Elle's importance to Emap. Before FHM, it was the company's biggest revenue earner, making around £4 million profit a year - a margin of about 30 per cent, and second only to the US edition. But according to former staff, Emap then centralised the way advertising was sold, which appears to have hit revenue. Today, according to Emap, the magazine makes around £2.5 million - not a bad sum, but apparently not enough to keep Hachette happy. Although Hachette says it was Emap's decision to quit, informed sources say that Hachette, concerned at falling profits, gave notice last year that it wanted to retain full control.
"It was still a steady profit provider, and you need a few titles like that in your stable to let you launch new things, which typically take three to five years to make profits," explains Elaine Foran, Elle's publisher for seven years and now IPC's fashion and international group publishing director. "It also gave Emap quite a lot of credibility." More importantly, it gave the publisher an influential title that brought in advertisers. "Flagships are a very good way to launch other things off the parent brand, such as the Elle Style Awards."
"This is extremely bad news for Emap," agrees Tim Brooks, former director of Emap Digital and now the MD responsible for Marie Claire and InStyle. "Its portfolio is very male biased. Elle got its foot in the door with the big glossy advertising clients. Now Emap is left with a lopsided portfolio - lacking a true fashion magazine when fashion and beauty advertising is very important."
Brooks also sees another problem. "There's a stable of stylists, photographers and models who'll happily work for Elle," he explains. "It will be more difficult for Emap to attract the same top-class individuals to their other titles, such as New Woman, if they don't have the magnetic attraction of Elle."
In the original deal, Emap gave Hachette a 50 per cent stake in New Woman, and it launched Red as a similar joint operation. Red is thought to be about to go into profit, and Hachette is no doubt seeking a payback on some of the £4 million invested in the launch.
But even now the two sides cannot agree. According to Hachette, it will gain full control of all the Elle titles, including Elle Decoration and Elle Girl, and other jointly owned titles that were originally part of Emap will revert to their former home. "We have no problem that Emap will keep New Woman and Top Sant," says Marie Muzard, a spokeswoman from Hachette's Paris headquarters. "The only debate is about Red, another of our joint ventures, which we're still discussing."
Emap disputes this, and says that the ownership of Elle Girl has not yet been settled. It also claims that New Woman "has a much more profitable track record" than Elle, and that the publisher can live without its former leading title. "I don't buy the flagship argument," a senior source at Emap says. "It's a good magazine, but its performance doesn't take your breath away. Like Elle, New Woman also makes around £2.5 million profit, but that's from a lower cost base."
He adds that the fashion and beauty world "is merging with the celebrity world, and Emap's other titles, such as heat, are strong performers there".
The company says that a new glossy monthly is "very actively being discussed, planned and is in a fairly advanced development stage".
Kevin Hand was unavailable yesterday, but Emap is in no doubt that he was behind Hachette's "very, very surprising decision" to buy Attic Futura. "Our reading of it is it's very personal," a senior insider says. "It reminds us that his disastrous foray into the States lost £500 million for Emap."
Those involved in the split say the divorce should be complete by the end of October, and the first "solo" Hachette issue will be dated December or January. Readers may not notice any immediate differences, but in the publishing boardrooms there will certainly be some further scores to settle.
(Evening Standard, August 28 2002)
IN the glossy world of women's magazines, it is the bitter divorce that everyone is bitching about. After a beautiful 10-year relationship, the couple behind Elle magazine are separating amid angry recriminations, a nasty custody battle and the curious satisfaction of a vengeful ex. It is a riveting tale of high-fashion love gone sour that could easily make the cover of a women's magazine - although you will not be reading it in any of those published by Emap or Hachette.
For it is these two giants of the publishing world that are currently at war over the future of their joint venture, the UK edition of Elle. Alongside Vogue and Marie Claire, Elle has long been one of fashion journalism's biggest success stories. Since Emap became an equal partner in the magazine with the French publishing house Hachette a decade ago, profits have rolled in, new titles such as Elle Girl have been born and - at least to the readers of "the world's biggest-selling fashion magazine" - the relationship has generated only beauty and health. But last week, Emap announced that it was seeking an "amicable and efficient break-up" for the deal. It would be giving up its stake in Elle, its flagship women's monthly, and would develop its own rival publication.
The crisis was triggered by Hachette's purchase of another publisher, Attic Futura, which competes with Emap over some of its younger women's titles. But those familiar with the break-up suggest that the split has been engineered by Emap's former chief executive, Kevin Hand, who resigned last year after leading the company into a disastrous foray into buying a group of American magazines. His departure earned Hand a "compensation package" of £662,396, but that, it seems, was not enough. So when Hand found a new job last January as special adviser to Hachette's president, Gerald de Roquemaurel, it is said that he encouraged the Attic Futura purchase in order to poison the marriage.
Hachette denies he played a role in the purchase. "The gut feeling within the industry is that Kevin has been angling to do this for some time, and now he's getting his own back," according to one well-placed insider. "Kevin was ousted by Emap, and he knows that Elle is very important to it. So he encouraged Hachette to buy Attic Futura purely as a place to publish Elle."
It is difficult to overestimate Elle's importance to Emap. Before FHM, it was the company's biggest revenue earner, making around £4 million profit a year - a margin of about 30 per cent, and second only to the US edition. But according to former staff, Emap then centralised the way advertising was sold, which appears to have hit revenue. Today, according to Emap, the magazine makes around £2.5 million - not a bad sum, but apparently not enough to keep Hachette happy. Although Hachette says it was Emap's decision to quit, informed sources say that Hachette, concerned at falling profits, gave notice last year that it wanted to retain full control.
"It was still a steady profit provider, and you need a few titles like that in your stable to let you launch new things, which typically take three to five years to make profits," explains Elaine Foran, Elle's publisher for seven years and now IPC's fashion and international group publishing director. "It also gave Emap quite a lot of credibility." More importantly, it gave the publisher an influential title that brought in advertisers. "Flagships are a very good way to launch other things off the parent brand, such as the Elle Style Awards."
"This is extremely bad news for Emap," agrees Tim Brooks, former director of Emap Digital and now the MD responsible for Marie Claire and InStyle. "Its portfolio is very male biased. Elle got its foot in the door with the big glossy advertising clients. Now Emap is left with a lopsided portfolio - lacking a true fashion magazine when fashion and beauty advertising is very important."
Brooks also sees another problem. "There's a stable of stylists, photographers and models who'll happily work for Elle," he explains. "It will be more difficult for Emap to attract the same top-class individuals to their other titles, such as New Woman, if they don't have the magnetic attraction of Elle."
In the original deal, Emap gave Hachette a 50 per cent stake in New Woman, and it launched Red as a similar joint operation. Red is thought to be about to go into profit, and Hachette is no doubt seeking a payback on some of the £4 million invested in the launch.
But even now the two sides cannot agree. According to Hachette, it will gain full control of all the Elle titles, including Elle Decoration and Elle Girl, and other jointly owned titles that were originally part of Emap will revert to their former home. "We have no problem that Emap will keep New Woman and Top Sant," says Marie Muzard, a spokeswoman from Hachette's Paris headquarters. "The only debate is about Red, another of our joint ventures, which we're still discussing."
Emap disputes this, and says that the ownership of Elle Girl has not yet been settled. It also claims that New Woman "has a much more profitable track record" than Elle, and that the publisher can live without its former leading title. "I don't buy the flagship argument," a senior source at Emap says. "It's a good magazine, but its performance doesn't take your breath away. Like Elle, New Woman also makes around £2.5 million profit, but that's from a lower cost base."
He adds that the fashion and beauty world "is merging with the celebrity world, and Emap's other titles, such as heat, are strong performers there".
The company says that a new glossy monthly is "very actively being discussed, planned and is in a fairly advanced development stage".
Kevin Hand was unavailable yesterday, but Emap is in no doubt that he was behind Hachette's "very, very surprising decision" to buy Attic Futura. "Our reading of it is it's very personal," a senior insider says. "It reminds us that his disastrous foray into the States lost £500 million for Emap."
Those involved in the split say the divorce should be complete by the end of October, and the first "solo" Hachette issue will be dated December or January. Readers may not notice any immediate differences, but in the publishing boardrooms there will certainly be some further scores to settle.
(Evening Standard, August 28 2002)
posted by David Rowan at Wednesday, August 28, 2002
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