Katie has a grand plan to bring style and fashion to the news-stands

Katie Grand is feeling confident. It's an unusual emotion in these times of market uncertainty. But, nonetheless, it's there: she has just returned from the European fashion weeks and, after a hectic fortnight, has a date of her own to look forward to.

This Thursday, Condé Nast will launch a new style magazine, LOVE, and Grand is at the helm. It's her fifth publication, having worked alongside Jefferson Hack and fashion photographer Rankin to set up hipster bible Dazed & Confused, before establishing the similarly cutting-edge Another magazine, moving to The Face and then, most recently, starting the alt-lux style title Pop.

At all of them, Grand exceeded expectations. Under her watch, Pop went from a twice-yearly experiment with a run of around 75,000 copies to a consistently profitable tri-annual production and circulation of 125,000. It also persuaded Madonna to pose topless and coaxed Liz Hurley into a swimsuit just six weeks after giving birth.

But circumstances are rather different now. Grand is the first to admit that "when the financial talk was taking place, the market was more buoyant". Yes, she has the backing of one of the largest publishing houses in the world, but she also has to navigate the roughest of economic waters – a danger from which Condé Nast is not immune.

LOVE will offer an unusual case. To start with, it won't be the same size as most monthly magazines, but comes in a "bespoke", slightly larger format. Weighing almost 1.5kg, subscription would be unfeasibly expensive, so it is to be sold entirely at the newsstand for a brave £5-an-issue. Initially at least, it will appear only twice a year. Nicholas Coleridge, managing director of Condé Nast in Britain, says this will ensure "the economic risk is not so great".

Steve Barrett, editor of MediaWeek points out that such high-end and niche publications are likely to whether the stormy economic climate: "People who can afford luxury goods can still afford magazines," he argues. "And for people who can't they are aspirational. It's the celebrity weeklies and the lads mags that will suffer."

Significantly, Condé Nast cites the Financial Times magazine How To Spend It as one of their principle competitors. Of course, LOVE will also face competition from other glossies. With its high-fashion sensibilities, Harper's Bazaar seems an obvious contender. Indeed, their March has conspicuously resized to compare with LOVE.

But Grand is aiming for a different aesthetic. "I see it as a style magazine, really," she insists. "But with lots of fashion included. That's what sets it apart, and it's what I'm best at: tapping into new cultures, and showing them in a fashiony, polished way."

It's the same fortuitous formula that she employed at Pop. In her other, non-magazine-editor life, she is one of fashion's most respected stylists, earning the nickname Katie 'Grand-a-Minute' for her work. Considering a list of her previous collaborations is like reading a who's who of fashion: Prada, Giles Deacon, Bottega Veneta, Mulberry, Marc Jacobs... et al.

The personal ties will help secure LOVE's ad sales (which, so-far, have generated above-target revenue). They'll also ensure there's never a shortage of A-list contributors. The first issue boasts the sort of line-up normally reserved for the red carpet, with Kate Moss, Lily Allen, Iggy Pop, Eva Mendes, Amy Winehouse and countless others featuring inside the magazine, and Gossip front woman Beth Ditto posing naked on the cover. Judging from her previous work, Grand seems likely to maintain this element of celebrity; she believes people "are more likely to respond positively to a face they know than a model they don't", and has hired Mark Frith, former editor of Heat magazine, as a consultant. This combination of fame and high fashion isn't so common in the UK. British Vogue has largely resisted the route of its American equivalent, which almost always features a Hollywood star on the front. Yet it's also a formula that there's an appetite for.

In America, Condé Nast publishes W magazine and, like LOVE, it's larger and more avant-garde than most magazines, though it comes out monthly rather than biannually. It's a comparison that Grand likes, and one which she uses to explain LOVE's relationship with Vogue: "People buy W as well as Vogue and that's how I see it with us," she says. "Vogue has a core readership who buy it every month. We won't be taking that – we'll be in addition, something different like W." Before now there has been an unease between the Condé Nast and Katie Grand brands. "There had been some problems politically," says Grand. "But Nicholas [Coleridge] and I had a very civil relationship. Eventually, at a party in 2007, he came over and said 'let's stop all this nonsense and work together'."

Initially, Coleridge was simply interested in acquiring Pop. Grand says that when erstwhile publishers Emap sold the title, Condé Nast had put in an offer, but lost out to Bauer, with whom she didn't have the best of relationships: "We had some difficulties within the structure," she explains. "It seemed that they weren't very interested in the title. They made things physically very difficult. We were virtually working out of a cupboard, each person had 5 square metres. It was an everyday reminder that we weren't a priority."

Curiously, since Grand announced her decision to resign, Pop's publication has been suspended until autumn, though Bauer insists that their commitment remains.

In the meantime, LOVE will be free to take Pop's place on the news-stand and, possibly, assume its role as the fashionista's niche read. If nothing else, muses Grand, they've got another six months until the next issue, and plenty of time to learn from the first. In the meantime: "Everyone's happy."