Time Out hopes to put a tough few years behind it with an ambitious expansion drive, after the man who brought hypercolour T-shirts to the UK struck a deal to buy half the publishing business.
Oakley Capital announced yesterday it had agreed to invest in a deal that values the group at over £20m. Peter Dubens runs the firm; he made his first million at the age of 22 selling T-shirts that change colour according to the wearer's body heat.
Tony Elliott, who founded Time Out magazine in 1968 as a single-sheet publication that cost a shilling, will keep 50 per cent of the group. He said: "This will give Time Out an enormous burst of energy. We have been struggling along with not enough money to do what we wanted to do. Now we are liberated to properly plan ahead."
Mr Elliott held talks with a series of potential investors over the past seven years, but was unwilling to let the magazine be swallowed by a larger media organisation.
He describes the investment as a "slightly glorious accident" after the Lastminute co-founder Brent Hoberman introduced him to Mr Dubens. Mr Elliott said: "I genuinely believe that I have found a real partner for what I expect to be a hugely successful worldwide digital journey."
Mr Dubens said it was "very rare to be able to help with such a renowned, iconic brand," adding: "Time Out has a massive digital potential." The companies have already created an expansion plan to put in place over the next three years.
Time Out publishes in over 30 countries around the world with an audience of 17 million per year. It has city magazines and websites, travel guides, applications and it runs events. Yet Mr Elliott said: "It has always been too undercapitalised to match its expansion plans. It was clear I would have to do a deal at some stage."
The publishing industry was hit hard by the global recession and the advertising slump that followed. Time Out suffered and in January its auditors said Mr Elliott would have to invest £3m to ensure it remained a going concern. He said yesterday that the group had never been in danger.
Henry Freeman, an analyst at Liberum Capital, said: "There has been a lack of working capital over the last two years due to the slump in advertising markets during the recession. This has starved the business's growth.
"With Oakley's capital injection Time Out will benefit from working capital for its traditional media products as well as growth capital to develop applications for the iPhone, iPad, and Android," he added. Time Out is to expand to cities including Paris, Berlin and Madrid and focus on broadening its digital operations. New launches will be online only, such as the recent Time Out Boston.
Mr Elliott said the company would not consider putting the sites behind a paywall. "As Time Out deals with information, it is built to last forever."
Time Out time line
1968 Tony Elliott launches Time Out as a single-sheet publication. It had an initial print run of 5,000 and cost one shilling. The paper was backed by £70 from his aunt.
1972 Circulation hits 30,000 as it became the leading listings magazine in the capital.
1981 Mr Elliott takes full control. Staff went on strike over pay and the magazine failed to be published for four months.
1981 Richard Branson launches rival listings mag Event while Time Out is off the news-stands. It collapsed within the year, and Branson then had a tilt at Time Out.
1982 Time Out Eating & Drinking Guide launched. Readership climbs past 85,000.
1988 Mr Elliott buys Paris Passion.
1991 Group launches Time Out Film Guide.
1995 Formed partnership to launch Time Out New York in 1995.
1997 Time Out Pub & Bar Guide hits the news stands.
2002 Publication's website forms links with DatingDirect.
2004 Closes Paris office.
2008 Lehman Brothers collapses – in ensuing financial chaos advertising tanks, publishers including Time Out struggle.
2010 Oakley Capital buys half of the business.Reuse content