Has cost-cutting cut too deep?

by Suzi Parker

   Jack Kliger has his work cut out for him.
   As the new president and CEO of Hachette Filipacchi Magazines, Kliger must follow in the tracks of David Pecker, an intelligent but quirky manager who is widely credited with a remarkable gift for slashing costs on troubled magazines and turning them profitable.
   The questions on peoples' minds: Has the slashing gone too deep and gone on too long? Can Kliger build from what's left?
   Many believe Kliger is up to the job. He is considered a talented, deliberate manager with a string of successes behind him in his years as a top Conde Nast executive. He was most recently executive vice-president of Parade magazine. He takes over at Hachette on June 1.
   ``He is a very smart man," says Roberta Garfinkle, senior vice president and director of print media at McCann-Erickson. "He has the same challenges as anybody starting a new job. He will be learning new magazines and a new system and a new company, " she says.
   "His biggest obstacle is building brands that have eroded over time because of pretty sharp bookkeeping," says one Hachette insider. "You can't keep tweaking circulation and the sales force. You just can't keep cutting back on goods and services. If you do it has a long-term negative impact. Now is the time to turn it around."
   Kliger will also be challenged to bring structure and order to an organization that for years evolved around the personality of one man, David Pecker. Under Pecker the constant drive to cut costs and his quirky management style drove off steams of competent editors and managers. As a consequence, analyst says, Hachette lacks the depth of management one would expect to find at the nation's third-largest magazine publishing house. Pecker left earlier this year to join Evercore Partners, which publishes the National Enquirer and the Star.
   "His initiative will be a marketing one,'' says one industry observer. "He must concentrate on internal growth instead of growth through acquisition."
   Kliger must also deal with Hachette's French owners, who through the years had come expect the consistent profits that came through Pecker's cost-cutting measures.
   Will the French kick in the kind of money it may well take to build Hachette in the fashion of its chief rivals, Conde Nast and Hearst? It's a question many raise.
   Hachette's 28 titles include Elle, Woman's Day, George, American Photo, Elle Decor, Home, Metropolitan Home, Mirabella, Popular Photography and Travel Holiday as well as a number of quarterlies and special publications.
   Reports of Kliger's appointment broke late last Friday and were followed shortly after by rumors of counter-offers by Conde Nast to keep him from leaving. By one report, Kliger signed a five-year deal worth between $2 million and $3 million a year, with a rare three-year cancellation clause. Hachette has declined to discuss the terms of Kliger's contract.
   At Parade, Kliger was responsible for marketing, advertising sales, research and promotion. From 1994 until he joined Parade in 1997 he held the title of executive vice president at Conde Nast Publications, where his duties included day-to-day reporting from 15 publishers and oversight of annual revenues exceeding $800 million. Kliger was publisher of GQ from 1985 to 1988, when the magazine saw a 45 percent increase in revenue, and from 1988 to 1994 he was publisher of Glamour.
   How will Kliger manage when he arrives at Hachette? "He won't be like a bull in a china shop," says Garfinkle, who called Klinger Monday to offer congratulations, only to learn he was in France. "That's not Jack. He will be deliberate and precise and not make any radical changes for a few months."