Knapp, grandson of the founder, is architect of a publishing empire.

Knapp, grandson of the founder, is architect of a publishing empire Glamorous homes with famous occupants, exquisite and carefully wrought interiors fill the pages of Architectural Digest, the magazine that is the foundation of Cleon T. (Bud) Knapp's publishing company.

Knapp, 50, is chairman of the $117 million-in-revenues, privately held Knapp Communications Corp. He and his wife Betsy Wood Knapp, a successful businesswoman in her own right and a company director, might well appear in the luxury-laden pages of Architectural Digest, what with a New York co-op, condo in Vail or house in West Los Angeles. As if that wasn't enough, the Knapps own Bon Appetit, too.

Behind the glamour and sophistication, though, his Los-Angeles based firm has been rocked recently by a major restructuring that led to the departure of two-thirds of the senior executives.

"It was traumatic to myself, personally and to the company," says Knapp. "Now they (remaining employees) are relieved, because they have more autonomy and more responsibility. They were somewhat smothered by a top-heavy company." So far, he adds, "I'm very pleased with the results."

The corporation reorganized along product lines -- each magazine became a separate company with its own management and incentive plan.

What there wasn't much room for, though, was upper-level managers. "They were caught in between me and middle management," he explains. "They saw a diminishing power base (under the restructuring), and were unable to change from a top-down style of management."

He hopes the new structure will make the company more responsive to the marketplace and more entrepreneurial. "In tough times a military structure works beautifully," says Knapp. "But not when you have a creative entrepreneurial company. It doesn't flourish under a top-down style of management."

Knapp seems to thrive on taking risks. The restructuring, an admitted gamble, is the latest move in a successful career built on his willingness to take a chance. At 27, in what he calls the "original leveraged buyout," he bought the 45-year-old regional trade journal Architectural Digest from his grandfather's estate for $65,000.

From the original one-magazine three-person operation with annual revenues of $150,000, Knapp has grown his company to more than 400 employees, added two monthlies (Bon Appetit and Home), two quarterlies (Best Selling Home Plans and Architectural Digest Travels), a book publishing division and a merchandise marketing arm.

Meanwhile, Architectural Digest has evolved from a semiannual black-and-white magazine with 15,000 paid subscribers and a policy of providing editorial coverage in return for advertising dollars to a slick upscale publication reaching almost 3.7 million people each month. Special editions are published in Italy and West Germany. Before Conde Nast's House and Garden was repositioned to compete directly with Architectural Digest, as one source put it, "designers and their clients were crawling on their hands and knees to be included in its (Architectural Digest's) high-gloss pages."

Ironically, it was the vacuum created by House and Garden's abandonment of its traditional upscale niche in the early '70s which Knapp filled with the reformatted Architectural Digest, a move that put his company on the road to profits and serious growth.

"We grew by taking risks," says Knapp. "I went contrary to what was then a popular business strategy -- marketing to the masses. I made a conscious decision to turn away from AD's trade background and turn toward a national upscale consumer audience." He modeled Architectural Digest's new look on the sumptuous and colorful European magazines that charged the reader a premium price to cover the higher cost of publishing. Typically, the design and shelter magazines of the time had advertisers shouldering the majority of that cost.

Long-time associate Peter Craig, a publishing consultant specializing in mergers and acquisitions, cites Knapp's willingness to take a chance a key to his success. "He hasn't made the right choice every time," says Craig, "But he's willing to step up to the line."

One Knapp choice that didn't work out was the 1979 acquisition of German-owned Geo for a minimum investment plus debt. Geo was repositioned several times, but a travel format was hit upon too late to stem losses and the magazine eventually was written off for $15 million.

Knapp was also involved, with Craig, in an unsuccessful attempt to buy California Magazine from Rupert Murdoch, back when it was known as New West. San Francisco Magazine was also targeted unsuccessfully.

"I think a smart publisher has the instinct to recognize when an opportunity exists," says Craig. "He has taken advantage of those opportunities."

One such opportunity seized was the purchase of Bon Appetit 12 years ago from Pillsbury Co., which had used the magazine as a company promotional publication.

Knapp converted the magazine into a zesty slick publication to focus on the food boom that began in the mid '70s. Like interior design earlier in the decade, food had become another mode of personal expression for the upscale. "I thought success with one magazine guaranteed success with another," says Knapp. In this case he was right. In 1986, Bon Appetit's combined advertising and circulation revenue was $40.3 million, almost double the 1981 figure of $20.2 million. Year-to-date advertising pages come to 407, almost exactly even with last year's count for the same period, around 408, although pages for the May issue were up almost 16 percent.

Home magazine, formerly Hudson Home Magazine, was acquired in 1981 and has contributed a steadily growing share to Knapp revenues. Gross ad revenues for 1982 were $2.4 million; last year Home posted ad revenues over $10 million, a gain of 320 percent. Circulation revenue has risen from $4.9 million in 1982 to almost $11 million in 1986. Total gross revenue for Home in 1986 was $21 million.

With ad pages up, nonprofitable operations cut back and the new restructuring aimed at increasing accountability at the product level, the company seems to have pulled out of a period of adversity stronger than ever. Of his ambitions, says Knapp, "It's a cliche around here that I constantly push the chips to the middle of the table. Fortunately I've won more than I've lost."

PHOTO : Bud Knapp: Staking his company on glamour

PHOTO : Cleon T. (Bud) Knapp...

PHOTO : Native of: Los Angeles 

PHOTO : Current residence: West Los Angeles

PHOTO : Age: 50

PHOTO : Spouse: Betsy Wood Knapp

PHOTO : Other achievements: Board of trustees,

PHOTO : UCLA Foundation; seats on the board of

PHOTO : directors at The Wilshire Bank, Los Angeles;

PHOTO : Gault-Millau, Paris; Damon Runyon-Walter

PHOTO : Winchell Cancer Fund, New York; the cabinet

PHOTO : of the Music Center's Unified Fund.