City AM, the free London-based business newspaper, has been sold to THG, the online health and beauty retail platform run by the multimillionaire businessman Matthew Moulding.
The 18-year-old freesheet, which had been on the brink of collapsing into administration, announced on Wednesday that it had been bought by THG for an undisclosed sum.
THG, which sells own-brand and third-party cosmetics, dietary supplements and luxury goods online, appears to be an unlikely owner of a newspaper that distributes 70,000 copies a day targeting financial workers in the capital.
However, City AM’s co-founder Lawson Muncaster said the deal was a “perfect fit”. “We both believe firmly in the power of business to make people’s lives better and we cannot wait to get started with our new partners,” he said.
Moulding, who has attacked journalists over what he claims was unfair coverage of THG, said: “We’ve long been reviewing opportunities in the disruptive media space but have waited for the right time and the right opportunity to make a digital step-change in adtech capabilities for Ingenuity”, referring to the firm’s digital brand building and e-commerce platform.
The “pre-pack” acquisition from appointed administrators BDO will result in City AM’s 40 editorial and commercial staff joining the THG Group. The City AM co-founder and longtime chief executive Jens Torpe will retire from the business.
The freesheet’s founders had previously said they were in talks with potential new investors, before targeting an outright sale, after it built up £1.2m in debt by the end of 2021.
City AM has been hit hard by the change in commuter habits after the coronavirus pandemic, coupled with a slump in the advertising market and the soaring costs of printing and paper required for its print edition.
Before Covid, City AM had been published every weekday but decided in January to make its Friday edition digital only because of the reduced number of financial workers going to the office at the end of the week.
Free newspapers in the UK, including the Evening Standard and Metro, have suffered in recent years, with advertising revenues declining and circulation dropping as commuters increasingly turned to their smartphones.
At the same time, the cost of printing hundreds of thousands of newspapers and getting them on to the streets has rocketed, with paper shortages and printworks closures hitting hard.
Evgeny Lebedev’s Evening Standard has cut its circulation to 310,000, is heavily loss-making and on some days prints just 28 pages. It recently appointed the former GQ boss Dylan Jones as editor, the first person to hold that post on a permanent basis since Emily Sheffield left in October 2021.
Metro, owned by the Daily Mail’s parent company, continues to distribute 950,000 copies a day but has made deep cuts to its staffing levels with many longstanding journalists leaving.
THG’s media arm launched its own print magazine channel in early 2022, including the title the Supplement, which it made available to all Myprotein customers.
Muncaster, who founded City AM with Torpe in 2005, said his partner had “worked tirelessly over the years to ensure that the good ship City AM sailed on through not just a financial crisis but a pandemic, too” and that Torpe would be much missed by colleagues.
“I am so proud to have embarked with Jens on an extraordinary journey,” he added.
Torpe said: “During our 18 years we’ve faced a few storms but none as turbulent as the past three years. We managed to survive lockdown but unfortunately we didn’t have the money to invest in digital and build on the strong progress we saw during the pandemic.
“I’m therefore delighted that a business like THG has taken over City AM. Their digital expertise will be a great asset, so after 18 years I take comfort in the knowledge that our ‘little baby’ will grow and become more than a teenager.”
City AM claims to have a monthly online readership between 1.8 million and 2 million, and print circulation of 67,714. It is distributed from about 400 travel hubs and commuter locations, as well as about 1,600 London offices.
The BDO partner Danny Dartnaill said: “The impact of Covid and changing commuter habits, combined with reductions in traditional advertising revenues, significantly affected City AM’s business. The sale of the business to THG is a positive one. It provides the best outcome for creditors in the circumstances, as well as saving the jobs of all staff and preserving the City AM brand.”
