Observer Standard collapse was caused by advertising crash

Mar 11 2009 by Tom Scotney, Birmingham Post

The Midland-based Observer Standard group of newspapers collapsed because of a catastrophic drop in advertising revenue, the firms administrators said.

They are now searching for a potential buyer for the newspaper group, which has titles including the Redditch Standard and Solihull Observer.

They confirmed production would go on this week although they did not make any guarantees about the future. John Whitfield and Neil Tombs, partners at Grant Thornton in Birmingham, were appointed as administrators to the group on Monday.

The Observer Standard Media Group published 20 weekly newspaper titles across the Midlands from Lutterworth to Evesham, as well as five periodical magazines and 30 online titles. The company was founded by West Midlands businessman Chris Bullivant in 1989 and grew to become the UK’s 14th largest newspaper group.

It is valued at an estimated £9 million, and has a readership in the region of 750,000 a week. It employs about ten people in a head office at Redditch and across nine regional sites across its catchment area.

John Whitfield, of Grant Thornton, said: “The company has been suffering from the decline in advertising in the region, particularly with regard to residential property advertising, and it was making losses prior to the cost cutting measures taken by the directors before our appointment.

“Currently distribution of this week’s newspapers will go ahead as usual, and we are seeking a potential buyer. No redundancies have been made to date and we are not expected to make any in the immediate future.”

The family-owned Observer Standard cut 20 per cent of its staff in November.