Saturday, December 16, 2006
Ad slump drives FHM out of United States
Emap, the British media group, is to shut down its FHM "lads' mag" in the US, following a disastrous downturn in advertising revenue and a shift in consumer behaviour towards spending leisure time surfing the internet.
FHM, which offers a monthly diet of scantily-clad women, comprised most of Emap's remaining US interests. Paul Keenan, head of Emap's consumer magazine division, said: "Trading conditions in the US market have deteriorated over the past 12 months and we do not expect an improvement in the near term."
Earlier this year, Emap was forced to close Sneak, a magazine for young girls in the UK, after it found its customers were glued to their computers instead. The company sold its French magazine unit in August after profit slumped.
FHM will continue to be published in its 30 other markets, including Australia, New Zealand and the UK, where it has long been the market leader. The FHM website in the US, which has two million users, will continue.
It is thought the FHM US edition made a loss of L2 million ($5.6 million) in the first half, on turnover of some L10 million. The magazine is the number two player in the market, after Dennis Publishing's Maxim, with a monthly circulation of 1.25 million.
However, the US market is heavily dependent on ad revenues, rather than cover price sales, and advertising has been in decline - the UK market is skewed the other way around.
Emap chief executive officer Tom Moloney said last month the company was "not prepared to tolerate long-term loss makers," and had hired Boston Consulting Group to conduct an "efficiency review" of its magazines unit.
If successful this would be rolled out across the group, he said.
After the sale of Emap's French magazines unit to Arnoldo Mondadori Editore SpA, the publisher controlled by former Italian Prime Minister Silvio Berlusconi, for ?545 million ($1.037 billion), the company returned L237 million to shareholders.
Emap had a five-fold increase in net income to L285 million for the fiscal first half, including a gain on the sale of the French unit.
