Prognosis: Available

Philadelphia's proud old Curtis Publishing Co. (the Saturday Evening Post, Ladies' Home Journal, Holiday, American Home, Jack and Jill) has fallen on hard times. Last week, in a letter to stockholders, Curtis President Robert E. MacNeal reported a nine-month operating loss, before taxes, of $11,192,837. MacNeal's report showed that by selling off some securities and by applying a $1,398,080 reserve for income taxes, the net loss was reduced to $6,381,330. But even with a fourth-quarter upturn that MacNeal predicts, Curtis is facing the most disastrous year in its history.

Curtis' president put a hopeful face on the picture. By "reductions in load, more effective use of equipment," MacNeal said, the company has "reduced expense ratios for 1962." He added that a few good years could go far toward offsetting the poor one by permitting a write-off of nearly $5,000,000 of the current deficit in tax credits.

Costly Facial. There are some gloomy realities behind these figures. The Ladies' Home Journal, once the uncontested doyenne of the women's magazine field, is locked in mortal combat with McCall's--and losing. McCall's has passed the Journal in both circulation and advertising, and the Journal has slipped into the red. Curtis' prize possession, the Post, was given an extensive and costly facial three months ago. And although the renovated Post has since shown a healthy growth--it touched a circulation high of 6,800,000 last month--it is not likely to finish the year in the black.

MacNeal said that the Post has stopped playing the "numbers game"--a trade term describing the practice of maintaining accelerated circulation at any cost. He also denied some of the rumors rising in the wake of Curtis' decline. It is not true, said MacNeal, that Curtis could not meet November interest payments on its debentures (no payment was due then), or that it would not even be able to redeem the debentures, i.e., repay the loans when due (not until 1986).

Working Control. The stockholders' report was silent, however, on another development that is not rumor. Although more than 50% of the voting stock in Curtis is widely distributed, a single block of 32% is held by Mrs. Mary Zimbalist, 85, widow of the late, longtime Journal editor, Edward Bok, and now married to Violinist Efrem Zimbalist. Another block of some 17% is held by the estate of Mrs. Zimbalist's father, the late Cyrus Hermann Kotzschmar Curtis, the former Maine dry-goods clerk who founded the Curtis publishing empire in 1883. (Mrs. Zimbalist is one of seven trustees of the estate.) Even without the stock in the estate, Mrs. Zimbalist's own holding--1,160,505 shares of common stock, 131,000 of preferred--represents working control of the company.

For more than a year, outside interests have been covetously eying the Zimbalist block. Newspaper and Magazine Publisher Samuel I. Newhouse offered Mrs. Zimbalist $20 per share for her common stock, but lost interest as its market value skidded from a 1961 high of 16 3/8 to 9 3/8. Although he publicly denies it, West Coast Industrialist Norton Simon, who got control of McCall Corp. in 1956, is reported to have thoroughly cased the prospect of buying the company. Other interested parties: ex-Senator William Benton, who made an early fortune in advertising and a later, larger one in the Encyclopaedia Britannica; and a Wall Street group, represented by the investment house of Carl M. Loeb, Rhoades & Co., which now holds some 600,000 shares, and is hungry for more.

Such activity adds up to an unmistakable fact: Philadelphia's proud old publishing company is available.

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