Bauer Media today announced its big decision to close its Australian distribution division, Network Services Company, moving all retail magazine distribution activities to PMP-owned Gordon & Gotch.
Gordon & Gotch picked up the contract today, after Bauer staff were informed of the closure yesterday, with the agreement subject to Bauer satisfying its employee consultation obligations.
“Bauer Media’s key focus is on content, not logistics. This decision will allow our business to continue to invest in our brands and focus on creating great content for our audiences,” Bauer Media operations director Eugene Varricchio said in a statement.
“We will be working closely with all internal and external parties over the coming days and weeks to ensure a seamless transition.”
PMP announced it expected the new five-year contracts to generate around $300 million per year in sales, with around $100 million to come to the table in the 2016 financial year.
The ASX-listed company also said it expected to write up a similar agreement to provide distribution services to other Bauer distribution service Netlink Distribution, subject to employment consultation obligations.
Bauer Media is currently in consultation with affected employees and will work closely to support them through this change.
The changes to Network Services do not affect Bauer Media’s subscription services, including online magazine subscription store, Magshop.com.au.
“I am delighted that Bauer Media has shown the confidence in Gordon & Gotch to outsource this important component of its business,” Gordon & Gotch GM for Australia David Hogan said.
“We are excited about the opportunities this arrangement will deliver for our business in the long term and for our publishing and retail partners.”
It comes after the shock exit of Bauer’s former local chief executive David Goodchild last month.