SYDNEY — Bauer Media Group is pulling out of Australia and New Zealand.
In a statement Wednesday, the German company announced it will sell its 43 Australian and New Zealand titles to Sydney-based private equity firm Mercury Capital.
The sale, which includes the Australian licenses to titles including Harpers Bazaar, Elle, Marie Claire and InStyle, is subject to regulatory approval, with the transaction expected to be completed in mid-July. A new name for the business is due to be announced in the coming months.
“We have been proud to be the custodian of these iconic titles in Australia. I am confident that under Mercury’s ownership they will continue to thrive,” said Veit Dengler, Bauer Media Group chief operating officer.
A spokesperson for Bauer Media Australia declined to confirm or deny that the sale price, as first reported by The Australian Financial Review, is 50 million Australian dollars, or $35 million.
Bauer entered the Australian market in 2012, paying 525 million Australian dollars or $514 million at September 2012 exchange for Australian Consolidated Press, the country’s largest magazine publisher. Last month, Bauer completed a 40 million Australian dollars or $28 million acquisition of Australia’s second largest magazine publisher, Pacific Magazines, from Seven West Media.
The Mercury Capital sale announcement caps off months of turmoil for Bauer’s Australian arm which, since 2012, has churned through six chief executive officers and closed a raft of titles following double digit circulation and advertising declines.
On April 2, blaming the economic impact of the coronavirus, the company shuttered its entire New Zealand operation, making all 237 staff redundant.
Later that month, Bauer stood down more than 50 Australian staff, made an additional 70 Australian positions redundant, and announced it would temporarily suspend the print editions of multiple titles. The nine brands suspended include Harper’s Bazaar, Elle, InStyle, Men’s Health, Women’s Health and Good Health. The brands’ digital platforms continue to post content.
According to a Bauer Australia spokesperson, the company “has every intention of reinstating these titles and to get team members back to work as soon as possible.”
There were further layoffs in early May following the Pacific Magazines acquisition. According to the spokesperson, the restructure has seen 124 redundancies across Bauer Australia and Pacific Magazines.
Other publishers to announce major cuts in May include BuzzFeed, which is closing its Australian division and News Corp Australia, which is shutting down the print editions of more than 100 suburban and regional mastheads.
But there are green shoots on the horizon according to Brendon Hill, Bauer Media Australia and New Zealand chief executive officer.
Following the Pacific Magazines acquisition, the company claims it reaches six out of 10 Australian women each month, with a combined monthly print readership of 6.8 million and a combined digital monthly audience and social media reach of 7.8 million and 30.5 million, respectively.
“With new ownership and our bolstered portfolio, we have unparalleled opportunities to connect with more Australians than ever before and continue our strategy of digital growth and innovation,” said Hill.
“Despite the challenges presented by COVID-19, we have seen significant growth in subscriptions and digital audiences across our food, home, youth and fashion brands, demonstrating that Australians still love and read our brands. We have seen great vision, success and growth under Bauer Media Group ownership and now look forward to working alongside Mercury Capital to build on this growth under a new brand in the future.”
According to media analyst Steve Allen, a director of Pearman Media, double and even in some cases, says Allen, triple digit surges in Australian magazine subscriptions during COVID-19 could assist stabilize magazine circulations in the long term.
“There’s been strong double digit declines in advertising revenue for the magazine industry for the past five years, principally because the media agencies turned their back on print five-six years ago and it’s taken clients a long while to reexamine what’s good for their brands,” said Allen, who forecasts Australian advertising revenues will be 20 to 30 percent down in the June quarter.