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W Magazine Goes on Hiatus, Furloughs Much of Its Staff



W, the hefty fashion bible known for publishing the adventurous work of top-tier photographers, had long been one of the magazine industry’s most august titles. While it costs less to run than Vogue, it is nevertheless expensive.

Now, it appears to be in serious trouble.

“The bottom has dropped out of the luxury market,” Marc Lotenberg, the chief executive of W’s parent company, Future Media Group, said on Wednesday evening. This, he said, has put the title in “survival” mode.

On Monday, the magazine’s editor, Sara Moonves, called her staff to tell them that many were being furloughed. Those who work on online content are staying on at reduced salaries.

Mr. Lotenberg blamed the economic upheaval caused by the new coronavirus pandemic for much of the magazine’s troubles, though he did not deny that payments to vendors have been late since January, acknowledging that numerous independent contractors have not been paid for their services. (He blamed this in part on the launch of a Chinese edition of W, which was scheduled for January and has now been moved to September.)

The magazine’s next print issue, previously scheduled for publication in the beginning of May, is being postponed indefinitely. Future Media Group’s most recent chief financial officer, Sam Recenello, just departed the company.

Many of the people on the editorial team remain hopeful that another buyer might emerge to take the title, founded in 1972, off Mr. Lotenberg’s hands. Even he seems to be open to this.

“All options are on the table,” he said.

But it’s not a good time for nonessential commerce of any sort. And there are other issues Mr. Lotenberg is facing.

It was June of last year when Condé Nast, struggling with enormous overhead and declining ad revenue, unloaded the long-suffering oversize fashion monthly to Future Media Group, a small publishing company that puts out Surface magazine, a design quarterly.

How well this would turn out was much gossiped about from the get-go. Mr. Lotenberg has a previous history of not paying bills on time.

According to a Future Media Group employee and others at Condé Nast briefed on the terms of the sale, Mr. Lotenberg was given a yearlong grace period for installment payments on the purchase of W. The period was extended from June to September, as his company’s payments had fallen behind. (Mr. Lotenberg said he could not discuss terms of the sale.)

The magazine had appeared to be off to a good start under Ms. Moonves, who became its editor after the acquisition by Future Media.

W’s Best Performances issue, released shortly before the Oscars and featuring actors from the year’s most prestigious films, had more ad pages than ever before. The main portfolio was shot by Juergen Teller, whose underprocessed shots, mostly free of retouching, have influenced a generation of photographers.

Work like this was helping to reestablish the magazine as a laboratory for photographers to do the kind of editorial work that Vogue and Elle don’t regularly publish.

First published as a broadsheet by Fairchild Publications as an offshoot of Women’s Wear Daily, the magazine became a glossy in the nineties and regularly published photographers like Tim Walker, Steven Klein, Mr. Teller, and Mert Alas and Marcus Piggott.

All of those men shot for Vogue, but Vogue was not known for featuring pictures of Brad Pitt on the floor with his pants down and bottom exposed. Vogue did not cast Madonna as a modern-day Mrs. Robinson surrounded by a harem of Brazilian male models who were barely old enough to drink.

But W, which did, nevertheless became a runaway success with advertisers.

It was sold to Condé Nast in 1999 as the centerpiece of a $650 million deal that also brought WWD, Jane magazine and a number of other retail trade titles under its wing. Over the next two decades, W won numerous American Society of Magazine Editors awards.

Things began to go awry around the time of the most previous financial crisis. Its longtime editorial director, Patrick McCarthy, was eased into retirement in 2009 (he died last year). Stefano Tonchi (a former editor of T, The New York Times’s fashion and lifestyle magazine) was hired to replace him.

As celebrities began using Instagram as their primary promotional vehicle and the advertising market became dominated by Google and Facebook, Condé Nast began to show signs of stress. Many of the company’s magazines went digital-only or shut down entirely. Editors at GQ, Glamour, and Vanity Fair departed.

Attempts to sell W went badly. Numerous potential buyers flirted with purchasing it, only to pull out. That gave Mr. Lotenberg an opening, even as numerous vendors of Surface Media were complaining of missed payments.

“We wound up being a little overleveraged,” Mr. Lotenberg said. He added that everyone was paid back, some with restitution.

When the sale was ironed out — WWD reported that Condé Nast was seeking $7 million to $8 million for W — Mr. Tonchi was dismissed. He now has a wrongful termination lawsuit pending against Condé Nast.

Mr. Lotenberg believes the future looks bright for W, despite the current economic situation. “I believe in the brand,” he said.


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Dialogue Weekend: China-U.S. relations are likely to remain on edge




U.S. President Donald Trump has signed the “Taipei” act into law. What influence will it have in the cross-Strait relationship? In Japan, the 2020 summer Olympics have been postponed. How will the world’s biggest sporting event be affected?

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How Economists, Too, Are Taking On the Coronavirus Crisis




“You want to protect the income of furloughed pilots but make productive use of their skills,” he said. He wonders whether there is a viable model in the approach taken in China, where restaurant chains negotiated agreements with big online delivery companies to take on their idled workers temporarily.

At the same time, Mr. Greenstone worries that policymakers aren’t thinking through the current containment policy until the end, especially considering that the coronavirus will remain with us until we achieve so-called herd immunity, which in the absence of a vaccine will require 50 to 70 percent of the population’s becoming infected.

“We need to think about what would a nuanced social distancing policy look like on the way down,” Mr. Greenstone said. Even if we manage to stall the spread of Covid-19 over the summer, he said, we need to assess the benefits of relaxing social distancing, and “measure that against the likelihood of a second wave.”

Addressing the economic policy challenge is, in the end, inextricably linked to dealing with the shock to the world’s public health.

Indeed, economists hold part of the answer to a critical task in defeating the disease itself: developing, and broadly disseminating, a treatment and ultimately a vaccine. Governments and philanthropies need a way to coordinate in allocating funds to the myriad efforts by public and private labs around the world.

Patents, the standard incentive to spur innovation, will encourage private pharmaceutical companies to develop a vaccine or a treatment only if there is the prospect of a big return on investment. But that will require high prices, which will limit access. Entire countries may not be able to afford treatments, along with many of the 27 million uninsured in the United States.

Michael Kremer of Harvard, a recent Nobel laureate, has for years studied alternative incentives, from prizes to patent buyouts by governments. He has also explored arrangements in which governments or philanthropies put up money to guarantee a market for the new drug, at a given price, and can then distribute it broadly.


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Market for Chinese-made masks is a madhouse, says broker | World news




The scramble for face masks has created a “madhouse” atmosphere among Chinese manufacturers, who are making huge profits as customers around the world fight to be the first in line.

Producers of masks and respirators are demanding to be paid in full before the products leave their factories and are supplying whoever can pay the most and pay fastest, according to Michael Crotty, a textile broker based in Shanghai.

Crotty, of Golden Pacific Fashion and Design, said he had spent all of Sunday dealing with a flood of new enquiries from US states, national governments, cities, hospitals, distributors and private companies seeking to protect their employees.

“It’s just a madhouse,” he said. “Money talks. The factory knows one thing: what’s in my bank account and when did it get there? And if it gets there before the other guy then that’s who is going to get the production time.”

Factories that have quickly changed their production lines to make masks are demanding 50% payment when an order is made and the other 50% before the masks leave the factory. With scams proliferating, those are often unacceptable terms to many buyers, especially those spending taxpayers’ money.

“The factory doesn’t care,” Crotty said. “They’re getting orders from people they’ve never heard of before. It’s a really unusual circumstance to have these factories absolutely in the driver’s seat. And they’re in the driving seat not of a Volkswagen but of a Mercedes limousine.”

Wearing masks has long been common in parts of Asia to combat air pollution and the spread of disease, but until now was rare in Europe and the US.

The masks on the market range from thin cotton coverings to fine-mesh surgical masks and respirators that form a seal over the mouth and nose and have to conform to strict specifications.

Some European countries are weighing up whether to advise the public to wear masks when not at home. Last week the CDC in the US issued guidance recommending wearing a mask in public spaces. Trump has shrugged off the advice so far, saying: “This is voluntary. I don’t think I’m going to be doing it.”

French and German officials blamed the US last week for using “wild west” tactics to outbid them, but Crotty said the outbidding appeared to be an all-against-all affair.

Over the weekend authorities in Berlin withdrew a claim that the US had “seized” a shipment of 200,000 respirator masks ordered for the city’s police force, a claim that led to an accusation of “modern piracy” from Berlin’s state interior minister, Andreas Geisel.

According to Der Tagesspiegel newspaper, the police now say they were outbid while the respirators were in transit at Bangkok airport. The Berlin authorities say it is unclear where they went and who the ultimate buyer was.

Der Tagesspiegel reported that the masks were made by the US manufacturer 3M, but it has denied any involvement in the transaction.

The company has come under intense public pressure from Trump in recent days for continuing to supply masks to other countries. On Thursday he invoked the Federal Production Act, which dates back to the Korean war era and has given the administration the right to use “any and all authority” to procure the protective equipment it needs.

“We need the masks. We don’t want other people getting it,” Trump said in a Saturday briefing to reporters. “That’s why we’re instituting [the] defence production act. You could call it retaliation because that’s what it is: it’s a retaliation. If people don’t give us what we need for our people, we’re going to be very tough.”

3M issued a statement on Friday saying that cutting off supplies of protective equipment to Canada and Latin America could cause a humanitarian crisis, but Trump stepped up his attacks on the company over the weekend.

“The people that have dealt with them, have dealt successfully with many companies over the last month, And they don’t like the way 3M has treated our country. They don’t frankly like the representatives of 3M,” he said.

Last week the US authorised the importation of respirator masks from China made to a Chinese standard that is close to US specifications for the N95, which filters at least 95% of particles that are 0.3 microns or larger. (The European equivalent is the FFP2 respirator.)

At the same time, stung by widespread reports of shoddy masks imported from China, Beijing took action to regulate producers. However, Crotty said the effect of the regulation has been to cut off supply. Beijing is only giving certification to companies that have previously sold on the Chinese domestic market, but Crotty said four-fifth of the factories he dealt with manufacture solely for the export market.

“Only 20% might have these certificates, so of course they’re going to raise prices higher,” he said. But he added that masks without certification could still be exported if they were labelled for personal or commercial use only.

Crotty said everyone involved in the market was trying to improvise in unique circumstances. “None of us have ever seen anything like this. The reaction to the pandemic in the US was not very well prepared. So I think hopefully there’ll be big lessons learned through all of this, when this tapers off.”


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