Friday, September 14, 2007

Hachette Cuts Show Results

Hachette Cuts Show Results
by Erik Sass

THE DECISION TO CLOSE A number of magazines, including Elle Girl, is having a positive impact on the bottom line of Hachette Filipacchi's owner, Lagardère SCA, according to the company's earnings report for the first half of 2007. Lagardère's overall global media business saw pre-tax earnings grow 13.5% to $288.6 million. Using current dollar values, net sales rose 6.7% compared to the first six months of 2006, to about $5.15 billion.
According to Lagardère, the company's "recovery plan" implemented in fall 2006 is beginning to pay off. Its press business, now part of Lagardère Active--which includes Hachette--enjoyed an earnings boost of 31.5%, to $80.6 million. Lagardère credits this to strong performances at established franchises, like its women's and celebrity magazines, but also to hard-eyed decisions to cut titles that were underperforming. These include Elle Girl and For Me in the United States, as well as a number of international titles.

The recovery plan involves many other elements, including the sale of some of Lagardère's stock in EADS, the struggling manufacturer of Airbus planes, laying off hundreds of employees at its headquarters in Paris, and buying new media companies in the United States that focused on digital platforms.

In April, Hachette announced the acquisition of JumpStart Automotive Media, an online ad network, for $110 million. Hachette President and CEO Jack Kliger is said to be working closely with new management at Lagardère to plan this and future expansions.

Lagardère has moved to hurry the transition of its media operations into multiplatform digital publishing, beginning with the appointment of Didier Quillot, formerly chief of telecom giant Orange France, last fall. Arnaud Lagardère, who heads parent company Lagardère SCA, has said the company remains committed to magazine brands as its core business.

Hachette Filipacchi is one of the world's largest consumer magazine publishers, reaching an audience of about 50 million in the United States alone through enthusiast magazines, including American Photo, Car and Driver, Elle, Home and Woman's Day.

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