There was an element of truth in the analysis. The magazine that Nick Logan, one-time editor of the NME and founding father of Smash Hits, had launched and then defended against the onslaughts of large publishing houses, was in decline. Circulation, which had once touched 80,000, had sunk below 65,000. The pop culture the magazine had been launched to celebrate was growing old. Worse, Logan himself had contracted cancer of the jaw and was thus unable, as he recuperated, to cast his obsessive eye over the small print as he once had.
Fortunately for those who enjoy a monthly fix of the new, the sharp and, occasionally, the laughable, Logan's principal characteristic is stubbornness. He put his features editor, Sheryl Garrett, in charge and let her get on with it.
Five years on, as Garrett leaves Logan's baby to concentrate on a baby of her own, the Face has never looked healthier. Despite the plethora of rival titles on the shelf, the Face is now comfortably selling more than 100,000 copies a month, advertising revenues are blooming, and profit is a reality rather than a pipe dream. More importantly, the Face's editorial content remains at the forefront of what is current.
It was quite a trick to pull off. Garrett has a theory as to how she and her team managed it.
"Nick never pays much," she says, sitting in a cafe, enjoying for the first time in five years the fact that she isn't at a desk 14 hours a day. "Nearly all the staff I recruited took a pay cut to work there. That's a strength."
What about the truism about peanuts and monkeys?
"Well, it means we get freelancers who really want to work for the magazine. We still get writers and photographers who are paid five times as much elsewhere, because they know their stuff will get seen. And on staff we get young people who don't stay for long - except me."
Garrett herself was one of the Face's pool freelancers, working at City Limits magazine at the same time, before she had a revelation.
"I had been freelancing for eight years," she recalls. "And I was watching Neighbours - it's what freelancers do - the day Daphne gave birth. And I cried. And I thought, it's time I got a proper job. I rang Nick up and it was the day his previous features editor resigned, so he offered me the job."
Being editor, though, was a different matter. Freed entirely by a proprietor who believed in delegation, she was able to dictate the direction the magazine could take.
"Nick was wise enough to realise that he didn't know what was going on in the heads of 20-year-olds any more," Garrett says. "Instead of letting the magazine grow old with him, he launched Arena to accommodate those urges."
The direction Garrett decided upon involved Ecstasy, aircraft hangars and about 90 beats per minute.
"I was lucky," she says. "The arrival of acid house gave the magazine a real sense of direction. When I put it in, at first we lost even more readers. It really pissed off the last of the Eighties types who wanted it still to be about matt-black gadgets. But gradually it built up."
A bit of raving, though, was not the sole reason why the magazine went "ballistic". The Face's ability to find artists, performers and fashion designers, and then to champion those worth championing, was second to none.
"We go to press two weeks before the magazine is on the shelves," she says. "So that gives us a big advantage in being up to date over the other glossies, which work months in advance. Also, we knew what we were talking about. It was our little world that we were reporting on."
It was also a world that the rest of the press was keen to latch on to. The Face has become the crib sheet of the national press: the week an issue arrives on the news-stands, the office is inundated with calls from other media organisations seeking contact numbers for the people featured in their pages. The explosion of interest has brought its problems.
"In the early Eighties, the Face was the only magazine ringing up a certain kind of big star. Now everyone from the Sunday Times to Marie Claire and Hello! is after the same people. My policy was that if they wouldn't give us what we wanted - in terms of access and exclusivity - then we'd go somewhere else. In that respect we're lucky not to be a specialist magazine. If you are a pop mag, or a film mag, you have to have the big star of the month on the cover. We can just say: 'OK, we'll put someone else on the cover'."
It is indicative of the magazine's position on the cusp of fashion, however, how many big stars - Madonna, Blur and this month Robbie from Take That wearing a dozen rings through his tongue (isn't it a spring?) - are prepared to play the Face's game. It is worth their while: there is no better place to be than on the magazine's cover.
"After every issue we get four or five phone calls from pop PRs and Hollywood agents shocked at what we have done to their clients," says Garrett. "And after every issue, we get four or five calls from their artists saying they really appreciated it."
And, as Jason Donovan found out, crossing the Face is as dangerous to your image as incurring the curse of Lord Gnome is to your political career.
"Believe it or not, I had two lawyers read that piece before it went in," says Garrett of the notorious item which incurred Donovan's ire and won him pounds 200,000 in libel damages. "I told his solicitors it would do him more harm than good to sue us. Judging by his career since, I was right."
This was not the only Garrett-generated Face item that caused a stir. There is also, after most issues, several yards of outrage in the press about their fashion spreads: pictures of models looking variously anorexic, too young, drug-addicted or dressed like participants in the Balkan war.
"There are always silly-season scare stories about," Garrett shrugs. "But normally it is about someone, like Calvin Klein, who has borrowed our style and put it in the mainstream. We certainly don't court notoriety."
Not that Garrett herself is ever tempted to wear some of the minimalist outfits that feature on the Face's pages. Like Logan before her, she drew many of her ideas from her staff (including the new editor Richard Benson), who were universally younger than her. So at 34, and four months from motherhood, was Garrett considered too old, too motherly, as it were, for the position?
"Well, I wouldn't like to be editing it at 40," she says. "But though the Face is supposed to be about British youth culture, I think the youth bit is a misnomer. Before I got pregnant I used to go to clubs virtually every night. I found it was the best way to stay in touch with what's going on. You can be 22 and too old for the Face, and be 40 and still find something in it worthwhile."
Instead, she will be writing for the publication, as well as many others keen for her eye on modern life. Little time for watching Neighbours now. Besides, would she want to watch anything that Jason Donovan has been in?