News Magazines faces threat of closure after losing £10m

by John Reynolds, Media Week 17-Jun-08, 07:30

LONDON - News International is understood to be set to close its loss-making consumer magazine division - News Magazines - as part of its efforts to rationalise and cut costs across the publishing group.

Key executives at News Magazines are understood to have been informed of the decision to axe the Chelsea-based unit, which made a loss of nearly £10m in its last financial year, after two and a half years of operation.

The fate of News Magazines' top executives is uncertain. They include chief executive Camilla Rhodes, managing director Sandy Whetton, commercial director Simon Hills and editorial director Judy McGuire.

It is understood News Magazines, which employs about 80 staff, around half of whom are in editorial, is planning to sell off its women's weekly real-life title Love it!, which has a staff of 35, and is considering publishing its monthly paid-for title, The Sunday Times Travel, from its newspaper headquarters in Wapping.

It is unclear whether the group will continue publishing Skymag, Britain's biggest circulation title, with a staff of about 30, which is sent to seven million Sky customers, although it has been suggested that it could also be rehoused in Wapping.

An industry source commented: "What is the point in losing £10m a year? I am amazed it kept it going for so long." A former employee added that he was "unsurprised" by the move, claiming it was "not an efficient operation".

The decision to close the division, which was set up at the end of 2005, follows a strategic review of the whole NI business by Boston Consulting Group, driven through by chairman and chief executive of News Corpor-ation Europe & Asia, James Murdoch.

The division made a loss of £9.97m in the year ending 30 June 2007, its second consecutive year of losses, on revenues of £12.2m, although these figures do not include the full-year financials of Skymag, which will not be disclosed until next year.

The division closed its glossy interiors monthly title, Inside Out, in March last year after just 10 months and has also axed plans to launch a new women's weekly title.

The latest available sales figures for the 68p Love it! show a fall of 10% year on year to 367,199 copies for the period July to December 2007.

News International declined to comment. News Magazines did not return calls.