Cult Beauty owner THG buys City AM newspaper

City AM has been providing a free newspaper for 18 years

In a surprise move, health and beauty retail group THG has bought business newspaper City AM.

THG, which owns brands including Cult Beauty and LookFantastic, has never owned a newspaper but has an online publishing arm with two magazines.

The free London-based newspaper was put up for sale earlier in July after it was impacted significantly by the pandemic and a reduction in commuters.

City AM co-founder Lawson Muncaster said the deal was "brilliant news."

Mr Muncaster - who owns a quarter of the business - said the deal would help it develop its online presence, which it hadn't been able to do before due to funding issues.

He told the BBC THG's previous experience in online publishing makes him optimistic about the newspaper's future.

"We can draw on THG's expertise and given they are a global business this is a chance to get our content out on an international level."

Described by Mr Muncaster as a "pro-business, pro-libertarian" business, THG has committed to the editorial independence of the paper and will not be closing the print arm of the company.

The deal will secure the future of City AM's roughly 40-strong workforce.

Following the deal, co-founder and CEO Jens Torpe has announced his retirement from the business.

He said he was "delighted that a business like THG has taken over City A.M. 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."

THG founder Matthew Moulding said the deal would help it reach a new audience.

"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" he said.

City AM, which has been running for 18 years, has a monthly online readership between 1.8m and 2m, with more than three-quarters in the UK, 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 move has been widely seen as a slightly new direction for Manchester based THG, which primarily runs ecommerce brands and platforms for third parties.

THG also holds content syndication partnerships with firms including Google and Bloomberg.