This week, the UK’s Stylist magazine advised its young women readers to get ahead of the stress of the pandemic and ask themselves: “I wonder what thought I will think next?”
The question might almost be posed to the magazine’s own publisher, which started 13 years ago with the pioneering ShortList magazine distributed free to commuters. The emphasis was on the quality of the content and even of the uniformed staff distributing the young men’s weekly. The self-description of “freemium” magazines seemed to fit. Two years later, ShortList Media launched Stylist.
The company was launched by Mike Soutar, who had started out as a rookie journalist at DC Thomson, in Scotland. He later became editor of zeitgeist magazines Smash Hits, FHM and Maxim, before turning his back on an executive career at EMAP and IPC Media, to launch ShortList Media.
Soutar and co-founder Tim Ewington said: “We were interested in the power of free. We wanted to see how the ‘Metro’ business model would work with consumer magazines.”
Together with former EMAP boss David Arculus, they managed – in a few short weeks of 2007 – to secure £4m of investment. Soutar’s first employer DC Thomson became the largest shareholder. Other backers included hedge fund manager Pierre Le Grange, French Connection founder Stephen Marx, film director Matthew Vaughn, and Arculus who became chairman.
Investors bought the vision of a market where the once-booming “lads mags” like Loaded, Maxim and FHM were no longer selling and – while there was an apparent gap for a title which targeted middle-class ABC1s – the digital natives expected high-quality content for free. The upshot was the 2007 launch of ShortList as a free weekly distributed by 650 trained, motivated and unformed merchandisers at rail stations and other centres across 11 major UK cities.
it was an instant hit with readers and, crucially, advertising agencies which backed it all the way to a 30% share of the men’s magazine market in under three years. The fledgling company had found a way to tap into an affluent male market which had, seemingly, abandoned the newsstand as once-powerful paid-for brands plummeted.
ShortList seemingly struck gold because it captured the essence of free publishing success: content that is ‘good enough to buy’ can guarantee an audience for advertisers. It was a brilliant startup.
But the real prize came with its 2009 launch of Stylist, for affluent 20-40-year-old female commuters. Like ShortList, Stylist started piling up media awards – and became profitable in under a year as ad agencies rushed to support it.
The company seemed to hit its stride also with the launch of the Emerald Street daily fashion and beauty email (loosely based on the spectacular but short-lived Daily Candy, in the US), the Mr Hyde daily email for men, Never Underdressed (“Elle for the digital era”), the splashy French launch of Stylist with the publishers of Marie Claire, and licensed editions of ShortList in the Middle East.
Despite having to navigate a UK economy rocked by the 2008 banking crisis, ShortList Media could do no wrong. It was a media industry star with booming print revenue and digital traffic amid the mayhem of traditional media.
But ShortList Media is no more.
The company, which closed its eponymous magazine in 2018, is now called The Stylist Group, and much of that early innovation and international expansion has been replaced by a new strategy. It is now wholly-owned by launch investor DC Thomson which paid almost £25m across the eight years up to 2015. Only Mike Soutar’s emphasis on “freemium” journalistic quality feels the same.
But things had to change. The reality was that the company, which had always fizzed with invention, made profit in only four of its first 10 years. And, now, overall advertising rates continue to decline, just as the cost of delivering content marketing is increasing. In the last three years, The Stylist Group has incurred total operating losses of £22m on revenues of £64m.
For 2018-19, CEO Ella Dolphin (ex Daily Mail Group and Hearst) reported losses of £8.8m, which included the ShortList magazine closure and “a significant year of transformation”. Even the Stylist Live exhibition whose 22,000 visitors to London’s Olympia had been trumpeted as an initial success has morphed into a smaller (but more profitable) event with visitors paying £80 per for admission.
Dolphin said: “Since the transformation into The Stylist Group last year, audience continues to increase across all platforms, our events programme has dramatically expanded with the creation of Stylist Live Luxe and the inaugural Remarkable Women Awards. 2019 also saw the successful launch of fitness brand Stylist Strong.”
It’s been a big change and not just because the company’s 110 headcount is about half what it once was. What was a free magazine publisher with ambitions to conquer the world is now “A power brand for a time when feminism and the united force of women has never been more relevant”. While the company is still loss-making (even pre-Covid), it is getting stronger. Of the estimated £15m revenue in 2019-20, the company’s print legacy now accounts for “just” 55% of revenues, with the rest divided between events and digital.
Look for the new potential in the fast-growing digital audience. Stylist is one of the UK’s strongest women’s media brands. In March, Comscore reported it had 2.2m monthly uniques, 20% ahead of 2019. But, stunningly, the company claims that it has leapt to 3.5m uniques during lockdown April. Whisper it, but Stylist may even have caught Cosmopolitan, Hearst’s digital leader among young women.
The big online leap coincides with the Covid suspension of the print magazine and also its digital distribution through Apple News, Readly, and the Stylist app. The other lockdown consolation is that the magazine now also has – 10,000 subscribers paying £21 per year for its digital edition.
The digital subs and paid-for events are the start of a plan to get readers to pay for “membership”, although the free printed magazine may be the very last part of the company’s founding strategy to be discarded. Indeed, that seemingly inevitable (eventual) decision may depend more on the successful diversification of commercial revenues than on the growth of paying readers. Put simply, Stylist needs to build new services that can at least replace its £7-8m print revenue and then provide longterm growth. These might include expansion of the following:
- Audio. Stylist’s campaigning ethos would lend itself well to ‘online radio’ for commuters. Watch how The Times of London does it.
- E-commerce. Substantial post-Covid opportunities
- Brand licensing especially in fashion, beauty, healthcare, and financial services
- Education, careers and training
In many ways, the strategy is to make the Stylist brand into a “movement” of young women, similar to that created by Cosmopolitan, which bankrolled the whole of Hearst Corp in the days when magazines could do that. This could just be the time for Stylist, whose readers may have been galvanised by all aspects of a post-Covid world.
But, even before the virus, Stylist’s powering UK audience might not have managed the hoped-for profits in 2021. The timetable may now have been pushed back by impending recession and the accelerated decline of traditional media.
These will be tough times for the best niche media companies. Which is why Ella Dolphin may be grateful that Stylist is owned by DC Thomson.
The five-generation family publisher has been the subject of criticism and scepticism for much of its 115 years, dating back to its earliest refusal to employ Catholics (yes), more recent resistance to union membership, and a reputation for secrecy.
But DC Thomson has confounded its critics with consistent success across a portfolio which currently includes: Findmypast (genealogy, accounting for almost 20% of the revenue), Brightsolid (tech services), Wild & Wolf (gifts), Beano Studios (multimedia) – alongside its historic Scottish newspapers, quaint old-fashioned women’s magazines (The People’s Friend and My Weekly), children’s comics, and magazine publishers Puzzler Media and Stylist. In 2018, the company acquired Aceville Publishing in a £9m deal which made it the UK’s fifth largest magazine publisher (with some 70 brands).
To most Brits, this most private of media companies is best known as the publisher of legendary comics Dandy and Beano, which have now spawned top-rated TV cartoons. But DC Thomson’s Dundee offices are also where countless luminaries of UK journalism (including the ShortList founder) started and where would-be executives learned how success can come from small budgets and smaller offices. The company’s success is usually under-estimated by the London media market 500 miles away. But DC Thomson has long been one of the most profitable UK publishers.
Last year, it made £21m of operating profit (down 75%) on £221m revenue. Some 20% of revenues came from outside the UK (half from the US). Some 40% of revenue is from print circulations (60% magazines, 40% newspapers). DC Thomson employs 2,500 people – almost 50% more than in 2000, since when the revenue has doubled.
The most striking feature of its accounts is more surprising even than the relatively transparent company filings: it has a mighty £600m investment portfolio which has almost trebled in the past 20 years. It is this financial success that has underpinned the DC Thomson publishing legacy and has, incidentally, also enabled it to become one of the UK’s smartest media investors. That’s the reality of a seemingly traditional business.
One former insider says: “They have a rather old-fashioned air. People imagine they are provincial and narrow minded but the truth could not be more different. Look at the board of family members: Christopher Thomson is one of the brightest intellects and smartest investors you could ever meet. Richard Hall is an ex lawyer, charming and urbane but with a mind like a whip. David Thomson is young and ambitious, a future chairman in waiting. And current chairman Andrew Thomson is the elder statesman; calm, patient and a respected presence at the helm.”
DC Thomson has been a shrewd and steady investor in almost every area of UK media, and has been much more techie than you would ever guess. The family owners will care little about their “new” reputation for taking the longest view of media investment. They don’t explain and don’t complain. They follow their instincts and back good people, even through bad times.
Although the energetic team at Stylist wonder how long it will be before British commuters and their print magazine can return to the streets, they are a bit less worried than many of their competitors. But it’s still going to be a very tough year or two.