By Alyson Fixter
The former chief executive and chairman of Highbury House, retired entrepreneur Ian Fletcher, has hit out at “appalling incompetence” at the struggling publisher, blaming departed board members for a string of mistakes that he claims have led to the failure of the business.
According to Fletcher, who invested heavily in the Front and Hotdog publisher in the mid-90s, former Sun editor Kelvin MacKenzie could not have known just how deep the company’s problems were when he spent nearly £3m buying up 20 per cent of its shares last summer.
MacKenzie stepped into the CEO role in September – a move quickly followed by the departure of all Highbury’s long-standing board members – but he walked away himself just before Christmas, saying he had been defeated by a “mountain of debt”.
“Having got into the hot seat I got the impression that he was appalled by the incompetence of the previous board,” Fletcher, former owner of the Yellow Advertiser newspaper group, told Press Gazette.
“You invest in a public company like he did at your own risk, you don’t have the opportunity to do due diligence.
“He was in a similar position to the one I was in in the mid-90s, when I took a chance on Highbury, but I initially invested a quarter of a million and he invested the best part of £3m.”
He said the collapse of the company’s prospective takeover by Future last year amid concerns it would give Future too big a share of the computing magazine market was the “tipping point”, and added that then chairman Simon Nethercote was wrong to depend on the deal as a rescue strategy.
“They gambled everything on doing a deal with Future despite the very obvious concerns over the competition issue, which were well known from previous discussions” Fletcher said, claiming that the company had refused to deal with a number of venture capitalists who were interested in doing business.
“To actually just deal with one party and one party only was irresponsible,”
he added. Future later stepped in and cherry-picked 38 titles from Highbury’s portfolio, which Fletcher described as “a fantastic deal”.
He added: “They bought for £31m magazines that, if Highbury had opened it up to venture capitalists as well as trade buyers, would have gone for £45m or even £50m.”
But he said the publisher had some “good, solid titles” remaining for prospective bidders, rumoured to include Dennis, Archant and Imagine.
“I think that their recent performance understates their true value, because however they performed over the last 12 months it has to be viewed against the background of a management team that have not been really focused on the day-to-day.
“Highbury still has a portfolio of some very good special interest titles – lowish circulation, highish cover price and potentially good advertising revenues – that’s always been the core of Highbury. And I know Front has had its problems but it’s a well-known title – I do believe there is a strategy that they could adopt with Front.”
Highbury said it had no comment to make on the issue.
● Freelances who have worked for Highbury claim the publisher owes them money dating back as far as August, and have said its accounts department has “chosen to bury its head in the sand” over the issue. The journalists, who asked not to be named, will now have to wait until the company is sold or goes into liquidiation, but fear they could get as little as ten per cent of the money back.