Good Housekeeping publisher is performing robustly after reorganisation under chief executive Arnaud de Puyfontaine
This week MediaGuardian 25, our survey of Britain's most important media companies, covering TV, radio, newspapers, magazines, music and digital, looks at Hearst Magazines UK.
It is said that when times are good, people love Good Housekeeping. But when times are hard, they absolutely depend on the monthly lifestyle magazine.
The theory appears to be true: it is the eighth best-selling magazine in the UK, proving that even in straitened times readers will fork out £3.90 a month for a chance to see how the other half live.
Good Housekeeping is thought to be by far the biggest single earner for its publisher, Hearst Magazines UK, and is also one of the country's most profitable titles.
And in a magazine market where most titles' sales are sinking, Good Housekeeping held its head above water with 409,000 sales a month last year, more than half of whom are subscribers. "It's really well edited; it's really well targeted; it's so solid and it stands for something," says one rival magazine publisher.
"It's incredibly practical but not dowdy. It's like Marks & Spencer when Marks & Spencer was great."
Good Housekeeping might also be a fitting motto for its owner, Hearst, which has propped up sales of its flagship UK titles such as Men's Health against a gloomy backdrop of across-the-board circulation declines.
The robust performance of the group's core titles is seen as one of the most impressive achievements of Arnaud de Puyfontaine, the chief executive of Hearst Magazines UK since 2009.
Described by a former colleague as "a real politician, very smooth", De Puyfontaine knows the publishing industry inside out. He helped to found Emap France in the mid-1990s, becoming its chief executive three years later.
The Harvard-educated Frenchman spent two years at the helm of Mondadori France group when it bought Emap France in 2006, before advising the then French president Nicolas Sarkozy on the struggling newspaper industry.
His diplomatic skills no doubt helped when he had to integrate rival brands, such as Elle and Red, into the UK portfolio following Hearst's $651m purchase of Hachette Filipacchi, the magazine division of French media group Lagardère, in 2011. "That could have been culturally very, very difficult," says one industry executive. "But it's gone through without any ripples at all and that's testament to him."
Hearst Magazines UK – formerly National Magazine Company, aka NatMags, before the Hachette Filipacchi deal – is the third biggest consumer magazines publisher in Britain, with just under 3m copy sales a month across its 20 print titles. But while sales at its top titles have held steady, the publisher's total circulation is down 10.99% year on year, according to the latest Audit Bureau of Circulations (ABCs) figures, for the second half of 2012.
An impressive start to 2013 by Bauer Consumer Media, the home to Heat and FHM, could see it overtaken as the No 3 publisher – although Hearst is likely to point to its increasing digital presence and other metrics not easily accounted for in the biannual ABC report.
In a spring clean following the Hachette Filipacchi deal, Hearst closed two titles, the struggling She and Cosmopolitan Bride, in 2011, and it offloaded another four – Psychologies, Coast, You & Your Wedding, and Prima Baby & Pregnancy – at the beginning of last year.
Hearst's range of upmarket titles, including Esquire and Harper's Bazaar, provide some insulation from the advertising declines hurting lower-end magazines. Advertising spend in consumer print magazines has fallen almost 40% between 2005 and the end of 2013, from £703m to a forecast figure of £431m. "Hearst has got a set of brands that are a bit more stable and the kind of products that shouldn't completely crash," says Douglas McCabe, a media analyst at Enders Analysis. The company is lumbered, however, with three ailing women's weeklies – Reveal, Best and Real People – which suffered double-digit sales declines last year in a troubled market. One source suggests there was a "brand disconnect" between De Puyfontaine and the three titles. "He is very good at the high end but I suspect finds it difficult to get in there and wrestle with the pigs," the source says.
In the transition to digital, Hearst has moved quicker than rivals such as IPC Media, the home to NME. Some titles, such as Men's Health and Esquire, have impressed online while others, like Cosmopolitan, have struggled in the past year. Its women's shopping website, Handbag.com, has stagnated since being bought for £22m from the Barclay brothers in 2006.
De Puyfontaine says that digital is at the heart of Hearst's business: "We are aligning our business to reflect the way consumers now interact with our high-profile brands. We know that they don't draw distinctions between social, digital and print; content is key. Therefore, we have realigned our editorial teams and made a significant investment in training, ensuring that the content they create is platform – and channel – agnostic; there is no longer a distinction between the digital and print teams, they are now one brand team.This ensures that the content they create feeds into all our platforms now, and in the future."
Hearst has also looked to innovate offline with its titles, launching spin-off cookbooks and events and experimenting with advertising. To the surprise of some UK rivals, De Puyfontaine has stuck with the US-born policy of heavily discounted subscription rates for its titles. For example, a year's subscription to lads' mag Loaded (£66.80) is three times more expensive than a year of Hearst's high-end title, Esquire (£20). Good Housekeeping, £3.90 per month, costs just £25.99 for a year's issues.
The move appears to be paying off: Hearst Magazines UK reported a pre-tax profit of £5.2m in the year to 31 December 2011 and analysts expect it to be in the black in 2012. Turnover was £324m in 2011, up from £309,631 the previous year, according to the latest financial results available at Companies House.
De Puyfontaine oversaw a reshuffle of executives earlier this year in a bid to introduce new digital thinking. A former Microsoft ad man, Stephen Edwards, became the company's new group digital sales director, and Elle appointed Phebe Hunnicutt, an ex-AOL women's group managing editor, as its digital director.
The appointments suggest there may be product launches in the pipeline, to follow the successful introduction of Women's Health and Good Ideas last year and online shopping site The UK Edit in February.
"Hachette has done the hard yards in developing digital platforms while NatMags were behind the curve," says Adam Crow, head of print brands at media buying agency MediaCom. "They were way behind the market in terms of digitisation, but have managed a massive catch-up."
