John Menzies adds 500 staff on sale of rival Dawson

Published on Monday 3 August 2009 21:47

LOGISTICS group John Menzies took 500 staff on to its payroll yesterday, after the news distribution business of rival Dawson was placed into administration and sold.

Menzies and rival Smiths News were due to take on a string of contracts from Dawson over the next 18 months, after negotiations with newspaper and magazine publishers earlier this year left Dawson News facing the loss of almost all of its business.

Dawson, which has several other small businesses, said yesterday that it had no alternative to placing its news distribution unit into administration, with the contracts handed over to its rivals immediately.

Menzies paid 500,000 for some of Dawson's assets, including short-term leases on depots in areas where it does not yet have operations.

Finance director Paul Dollman said the acquisition would have little impact on Menzies' profits in 2009 due to start-up costs, but revenue from taking on the contracts early would be boosted by more than 40 million.

Dollman said Dawson's demise was caused by the "natural evolution of a changing market", with print volumes from newspapers and magazine dropping over the last five years.

He said: "The industry has been shrinking and when the contracts started getting negotiated it became obvious that you didn't need three players, two was enough, and natural competition forces came into play."

Menzies' new contracts, some of which were not due to start until 2011, are spread UK-wide with the firm establishing bases in Kent and the north of England.

Dawson, which began as a newsagent in London 200 years ago, said it would focus on its other businesses, which include supplying academic texts to universities.