'Mirror' seeks help from McKinsey

Click to follow
The Independent Online

Sly Bailey, the chief executive of newspaper group Trinity Mirror, has turned to management consultants McKinsey six months after launching her new strategy. The appointment will fuel speculation she is planning another wave of cuts at its struggling national newspaper division.

McKinsey and Trinity Mirror, which reports full-year results on Thursday, declined to comment.

McKinsey last advised Trinity Mirror in 2002, when the company spent £20m on a revamp of the Daily Mirror and an ill-advised price war with News International's The Sun.

Ms Bailey, who became chief executive last February, announced the results of her strategic review last summer, with savings of £45m targeted by the end of 2005, more than half of them to come next year. She also announced 5 per cent job cuts.

After December's trading statement, the company told analysts it was looking at making further savings in procurement, manufacturing and distribution processes. More costs could also be taken out by cutting editorial positions on the national titles. Even after reducing the headcount at the Daily Mirror from about 370 to about 320 last summer, it is still 50 more than when Piers Morgan took over as editor eight years ago. It will update the market on the plans this week.

Ms Bailey's biggest headache is the declining sales of all three national titles - the Daily Mirror, Sunday Mirror and The People - which led to a 5.7 per cent fall in advertising revenues at the group last year. Advertising revenues for its regional newspapers were up 3.9 per cent.

Analysts at Société Générale Securities predict a pre-tax profit of £168m.