In a move that surprised many observers, health and beauty retailer THG has snapped up business newspaper City AM, saving it from insolvency in an eleventh-hour deal. How does the paper fit in with the rest of THG’s business? Retail Week finds out
The new owner of City AM is Manchester-based health and beauty retailer THG, whose chief executive Matt Moulding is famously known not to be the biggest fan of many financial media publications following their criticisms of his business after its IPO.
The company, which owns brands such as Lookfantastic and MyProtein, is understood to have paid a “small seven-figure sum” for the newspaper, saving it and its 40 staff from a likely collapse.
The unexpected pairing may seem incongruous at first, but Moulding sees the opportunity for mutual benefit.
Getting closer to consumers
City AM has a monthly reach of 2 million people and a print circulation of 250,000 a week, mainly consisting of people working in finance in London.
In a LinkedIn post, Moulding said THG spends more than £200m a year on communicating with consumers and the decision to buy City AM brings the retailer closer to them.
THG cited ad tech revenue and a database of a financially literate audience as primary reasons for the unlikely addition to its portfolio.
It expects its tech arm THG Ingenuity and its clients, which include brands such as Coca-Cola and Nestlé, to benefit from this deal through commercial opportunities by accessing the readership.
The newspaper’s lifestyle and sports content, which THG expects would complement its beauty and nutrition apps audience, is another area where the retailer may benefit.
Gregor Murray, vice president of strategy at Digital Commerce Global, a provider of digital ecommerce solutions, says: “Many of the core THG brands like Lookfantastic, Glossybox and MyProtein are targeting a young, affluent and aspiration audience, many of whom will be in the finance, law, creative and professional service audience that are regular readers of City AM.
“There is a clear fit in terms of promoting their core product propositions, increasing their audiences and build brand awareness. I think this is a bold step from an organisation that already has a reputation for disruption, innovation and playing by its own rules. I can only see this acquisition benefiting THG, its customers and the readers of City AM.”
Editorial vision
Moulding, who has been a critic of the financial media and the City, reasoned: “The fact that most of Britain’s media are foreign-owned can’t be ideal. Almost all the press have long abandoned their LSE listings. Even the Financial Times recently raised the white flag, left the LSE and sold itself to the Japanese.
“So, while THG is mostly interested in building ad tech reach with City AM, it has to be a good thing that one of the UK’s most influential business papers remains in UK ownership.
This isn’t the first time the retailer has ventured into the world of media, with both MyProtein and Lookfantastic producing their own magazines with a circulation of 550,000 per edition.
Moulding added: “Like with all our other media assets, neither I nor the board will be driving editorial content, there are far more talented people out there to do this. But there’s a clear gap in the UK business media, one that supports and appreciates UK business, and is keen to see the UK improve our global competitiveness. City AM, THG and our partners will now step up further to fill this gap, loud and clear.
”And so, supported by unswerving investment from THG, there will be just one rule for the future editorial direction of City AM: where possible, be a cheerleader for both the UK and businesses alike, and don’t get dragged over to the dark side.”
But at a time when the retailer is undergoing a strategic review to simplify and streamline its operations by cutting loss-making categories and businesses, buying a struggling newspaper may be a case of one step forward and two steps back.
THG recently sold its loss-making incubator division OnDemand to specialist investors Gordon Brothers, following the sale of ProBikeKit to Frasers Group earlier this year, raising £4m between them.
An industry expert says: “Obviously City AM won’t have cost THG that much money but it’s hard to avoid the view that Matt Moulding should have plenty of other things to do.”
As the tech giant dabbles in traditional media with a deal that City AM co-founder Lawson Muncaster calls a “perfect fit” for the business, Moulding’s vision for the struggling newspaper will have to become clearer soon.
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