Dateline Lisbon, Portugal: First port of call for a lucrative media market

A GLANCE at Portugal's stock market high-flyers in recent years suggests that a good way to make money in this apparently low-key and prudent society is to invest in melodramatic television soap operas and glossy magazines devoted to fashion, interior design and arty leisure style.

The Portuguese, despite their reputation for dour melancholy - especially compared with their noisier Iberian neighbours - cannot get enough of these frivolous delights. And dishing them up in spades is a roaringly successful media group whose latest creations are being orchestrated by a Brit.

"For decades the Portuguese were politically and economically starved of leisure and entertainment media. Now they are bounding ahead, catching up on all the fun things they missed out on for so long," says Anthony Smith, 37, a Mancunian settled in Lisbon, who devised and launched two successful magazines in the past two years and has others up his sleeve.

Once cowed by poverty and dictatorship, Portugal has blossomed into a prosperous EU member that joined the euro with its Maastricht criteria in order. It is as if a maiden aunt had kicked up her skirts to begin what Mr Smith calls "an incredible, startling transformation".

The liberating spirit is still largely Lisbon-based: much of rural Portugal remains stuck in its ways. "But one of the advances brought by EU membership in 1986 was the building of a national road network that shrunk the whole country. So the capital is more accessible than it ever used to be," says Mr Smith.

Portugal always had a great deal of style, and a vibrant craft tradition in ceramics, glassware, wrought iron and textiles. With the new prosperity, the trick was to infuse new ideas into old skills and popularise a culture of good taste. A huge new market based on this idea opened with such success that Lisbon can now match Barcelona as a mecca for international cool.

Anthony Smith began his career as an agency journalist who, when urged by his bosses to move on to other postings, opted to break free and stay in Lisbon. "I guess I was in the right place at the right time. I always wanted to be in magazines, and I'm very interested in style."

The flagship glossy Maxima, launched 10 years ago, saw off many competitors to become Portugal's top-selling women's monthly, the only truly home- grown product in the field. "It built up such a successful advertising base, particularly in cosmetics and beauty products, that the owners decided to cash in on the Maxima name and launch related magazines to dilute fixed costs and diversify the type of advertising and clients," Mr Smith says.

Under Maxima's wing, two years ago he launched Interiores, a slick and cheerful monthly guide to decorating and furnishing your home with good taste and little money. Last October, City, a colourful monthly review of arts and entertainment was launched. Both caught on instantly with their target A/B audience.

"In the last four years there's been a boom in anything to do with design and decor, with more houses, more people buying rather than renting, and wanting guidance on how to do up their new properties stylishly without spending a fortune," Mr Smith says. "They've become more culturally aware and, with more money around, they want to take time off to have fun."

Mr Smith's tiny office, packed with mountains of papers, is scarcely more luxurious than his former poky newsroom above a nightclub - apart from the glorious view over the glinting Tagus estuary. At the end of a narrow corridor is a bright, but leanly staffed, production room, jumping with youngsters hurtling to meet this month's deadline while languidly consuming ice lollies.

The three magazines are part of the holding company Investec - one of the best performing companies on Portugal's stock market. Investec, whose profits have more than tripled in the past four years, also has interests in Portugal's top sports daily, Record - the country's most widely read daily newspaper - and the phenomenally successful private television company, SIC.

Through a preferential deal struck four years ago with the Brazilian Globo company, SIC cornered the market in imported Brazilian soap operas - high-class melodramas that dominate Portugal's prime-time viewing. SIC sought to make the Portuguese housewife switch on her television after lunch and stay until bedtime. Most of the nation is in thrall to hour- long doses of Capital Sin, Smooth Poison and My Good Love that sprawl back-to-back across the schedules, outscoring even football in popularity.

SIC's overwhelming dominance has eased slightly under the onslaught of competition from other television companies, but it remains one of the most successful companies in Portugal and a valuable cash cow for new publishing ventures.

Investec, which owns 25 per cent of SIC, is part of a wide-ranging leisure and media empire controlled by the buccaneering entrepreneur Jose "Joe" Berardo. A burly bear of a man, shy of making public statements, he started out as a tobacco baron in Madeira before decamping to South Africa where he made a fortune as a commodity trader during the apartheid years.

Returning to Portugal some 10 years ago, Mr Berardo - who has a reputation as a swashbuckling rough diamond - sought to re-establish himself. He formed a partnership with a man who is in every way his opposite: the pint-size, cultured and histrionic Francisco Capelo, a financial whizzkid - Mr Berardo's former broker - turned art connoisseur, who is chairman of Investec and the artistic inspiration behind its proliferating publications.

The combination of Mr Berardo's fortune and Mr Capelo's eye created within a few years a $60m (pounds 38m) collection of post-1945 European art housed in the Modern Art Museum that opened two years ago in Sintra, near Lisbon. And this month saw the inauguration of Lisbon's Design Museum as the showcase for Mr Capelo's collection of 600 design classics from the 1940s to today.

Anthony Smith, nervy newshound and hands-on editor, shamelessly plunders for Interiores and City the design ideas and social buzz surrounding these explosions upon the Portuguese art world. The preposterously divergent three-man team, with their regular attendance at fashion shows and gala dinners at the presidential palace, exude a heady glamour. But their icily conceived, no-frills business formula is, according to Diego Hernando, director of one of Portugal's largest stockbrokers, Midas, "very intelligent and stunningly successful".

Mr Smith says he is in contact with German and British publishing groups about future projects, without specifying what these might be. But he admits that health and fitness, and men's magazines, remain undeveloped in Portugal's lucrative media market. Which should convince those eager to turn a profitable euro that Portugal has more to offer than "fado" singing and salt cod.