The latest issue of Hearst’s Good Housekeeping carries "tried and tested" tips for Christmas, but the US-owned magazine giant is facing its own housekeeping issues after a wave of senior departures in the last month.
Anna Jones, chief executive of Hearst UK, quit after two-and-a-half-years in charge to co-found All Bright, an investment company that backs female entrepreneurs. Lorraine Candy, editor of Elle for 12 years, left to take up the role of luxury content director at News UK. And Andy Hart, chief revenue officer of Hearst Magazines International in London, has exited after only a year.
Adding to the impression of an exodus has been the departure of Ella Dolphin, UK group commercial director, who quit in May to be chief executive of Shortlist Media, and Duncan Edwards, chief executive of HMI, who stepped down in June without being replaced.
"The industry is struggling as advertisers shift spend from print to digital"
The US parent company, led by David Carey, has taken closer control by integrating the international magazines with the US leadership under a "One Hearst" initiative.
"I hear the Americans are very involved and ruling with an iron fist, so no-one can make their own decisions," a London agency source claims. A Hearst UK spokesman dismisses this, but noted that the UK and US have always worked closely and collaborated strategy.
Privately owned Hearst, which also has interests in TV and medical information, is keen to cut costs globally in magazines. "The industry is struggling as advertisers shift spend from print to digital," Brian Wieser, a US analyst at Pivotal Research, says. "We know Time Inc and Meredith, two public companies for which we can get ‘actual’ data, are declining year on year by high single digits or low double digits on a like-for-like."
Hearst was smart to set up Hearst Ventures, which has made a series of digital investments worth $1bn, including in BuzzFeed, but the pressure is on its magazines to digitise too.
Observers say Jones has done a decent job. She joined in 2011 from Lagardère, publisher of Elle and Red, following its acquisition by Hearst, and became chief executive in 2014. She expanded in digital, content and events –the latter saw revenues rise 50% last year – but a strategy of distributing discounted print copies of some titles has meant a lower proportion of actively purchased and full-price sales compared with rivals such as Condé Nast.
Cosmopolitan cut its price to £1 last year in a gamble on advertising and a bigger digital audience. An Enders Analysis study found print circulation rose 58% but ad yields grew only 30%.
Hearst UK has yet to file 2015 accounts but the 2014 accounts showed its operating profit halved to £7m and revenues fell 5% to £296m.
Thomas Caldecott, an analyst at Enders, described Hearst UK’s performance as "middling". Digital has been "nowhere near enough" to offset the decline in print, he says, adding: "It’s very worrying if you’re trying to extract maximum value from advertising."
Hearst plays down talk of an exodus and its allies say it is largely coincidental and the company has been partly a victim of its own success. Dolphin and Candy were both poached while Jones wants to satisfy an entrepreneurial urge.
Hearst is now deciding how it replaces Jones, but insiders dismiss chat about a change to the role of chief executive. The publisher could need a new UK home as its Soho base is a tired building and the lease runs out soon. Whether Hearst reinvests in London or downsizes, as Time Inc has done by moving some staff to the shires, will be telling about its commitment to the UK.