Applied Graphics Loses Large Magazine Contract
NEW YORK—Applied Graphics Technologies and Condé Nast Publications have agreed to terminate their 1996 contract under which AGT provided prepress production services to Condé Nast magazines.
A Condé Nast spokesperson confirms that, beginning in December, the work will be done by Quad/Imaging, a division of Pewaukee, WI-based Quad/ Graphics.
According to Steven Florio, CEO of Condé Nast, "the contract between AGT and Condé Nast contemplated that, at the end of the third year, the parties would re-evaluate the relationship. Despite the fact that Condé Nast was pleased with the high level of quality and service provided by AGT, the parties could not reach agreement on pricing and decided to terminate the contract."
"Although AGT will no longer provide prepress services to the magazines, it will continue to provide services to Condé Nast's advertising and promotional departments," Florio adds. "We continue to value our long-standing relationship and look forward to working together in the future on mutually agreeable terms.'
The AGT contract reportedly covered 13 of the 17 Condé Nast magazines including Vogue, Vanity Fair, Glamour and GQ. For the seven months ending July 31, 1999, revenues from Condé Nast magazine business were $6.7 million, representing approximately 2 percent of AGT's total revenues for the same period.
The news did not help AGT's stock price, which was trading at more than $14 per share in June, and dropped to just over $9 following the news. But the news was not a huge blow: AGT stock is also up from a 52-week low of just under $6 in May.
The news was a surprise to industry observers, in part because only last month, AGT had moved its satellite office from the old Condé Nast building on Madison Avenue into the basement of the new Condé Nast skyscraper in Times Square. Quad is expected to move a satellite office into the Condé Nast building by the beginning of the contract in December.