Hearst, the US-based magazine publisher, has finalised the purchase of a rack of top titles from French publisher Lagardère, including Elle Decor and the rights to Elle magazine outside of France.
The move comes as magazine advertising is bouncing back from the depths of the recession. Last year US magazines enjoyed their first full-year revenue increase since 2007, driven by a 21.9% surge in car ads, according to the Publishers Information Bureau (PIB).
The cash deal, worth €651m (£573m), has been under negotiation for more than three months. The takeover will combine the US publisher's stable of titles including Cosmopolitan, Harper's Bazaar and Good Housekeeping with assets including 102 of Lagardère's titles in 15 countries including the US, UK, Russia and Ukraine, Italy, China and Japan. While the deal is now done, it still faces regulatory scrutiny on both sides of the Atlantic.
The transaction includes publishing rights to Elle magazine outside of France as well as 10 editions of Elle Decor around the world, Red magazine in the UK and Holland, and digital operations comprising 50 websites and numerous mobile and tablet applications. Elle sells 195,000 copies a month in the UK, while Red shifts more than 225,000, some way behind the market leader, Glamour, on 547,600, according to the latest figures from the Audit Bureau of Circulations.
Hearst is a private company and as such does not publicly report ad revenues but a spokesman said it was enjoying the same recovery being experienced by the overall magazine market. He said Hearst's magazines had been recovering since a low in 2009 with a strong third quarter, and the company was projecting that sales would be significantly up for the year.
According to PIB, US advertising revenue at Hearst's Cosmopolitan rose 9.2% last year; Elle rose 12.2% and Elle Decor 29.6%. The deal with Lagardère makes Hearst the second-largest US magazine publisher by circulation, behind Time Inc, and bolsters its international reach, strengthening its portfolio in several key categories, notably fashion and beauty and women's lifestyle.
Hearst owns National Magazines in the UK, publisher of Esquire, Harper's Bazaar and She, among other titles.
"We think ink-on-paper magazines will be with us for a very long time and we want to strengthen our hand," its chief executive, Frank Bennack, told the Wall Street Journal last month.
The recession wiped out many magazines, hitting advertising just as advertisers were making the transition to digital platforms. In 2009, 428 magazines folded in North America, according to Media-Finder, and 275 new titles were launched. A further 176 titles closed last year but closures were outpaced by 193 launches. The number of ad pages in consumer magazines declined by 25.6% in 2009, before levelling off to a decline of 0.1% in 2010, according to PIB.
As well as enjoying a boost from car ads, US magazines last year attracted double-digit increases in financial, insurance and property ads, and in advertising for toiletries and cosmetics.
"There's light at the end of the tunnel and it's not the train coming," said Samir Husni, director of the magazine innovation centre at the University of Mississippi's school of journalism. "People are starting to realise that print is not dead. Look at Tina Brown [former editor of Vanity Fair and the New Yorker]. She went digital and now she believes there's money to be made in print. The iPad is not going to kill the magazine."
Husni said that it was clear that physical magazines were here to stay and that although consumers were ever more demanding, they enjoyed buying and reading hard copy: "The clever publisher of the future won't give you either/or [print or digital media]. It's going to be about providing both."
