Lonely People stranded as Mirror moves on

Anthrax has replaced 'EastEnders' at the daily title. But its Sunday stablemates have been left downmarket. Will they stay there?

Not content with owning Harrods and Fulham Football Club, Mohamed Al Fayed fancies himself as a newspaper proprietor. However, he is said to have pulled out of talks to buy the Sunday People last week because the £60m price tag was too high.

The fate of the People has been a subject of gossip among hacks and City folk for years, with incidents such as the row over the publication of nude pictures of DJ Sara Cox when she was on honeymoon adding to concerns about falling circulation. (The People's sales have been falling while its two stablemates, the Daily and Sunday Mirrors, have been rising and its main rival, the News of the World, is selling two and a half times as many copies.)

But as Trinity Mirror, which owns the People, prepares to present its interim results to the City on Thursday, the future of the Sunday title – the most downmarket in the group – is provoking more speculation than ever. After a year-long review of all Trinity Mirror national titles under Joe Sinyor, the branding and marketing expert brought in as chief executive in charge of national newspapers, the City has been promised a new strategy. Where the People features in that is an open question.

Although a Trinity Mirror spokesman is categorical that the People is not for sale, the company has privately made clear that it is open for offers, making approaches to both Mr Fayed and the Express proprietor Richard Desmond. "Like any business, you will get some offers to buy them and, as a plc, you have to look at them," the spokesman says. If it cannot raise the sort of cash it wants, it will keep the paper.

One old newspaper hand observes that the problem has existed for the 40 years the People has been part of the Mirror group. "When Cecil King [then chairman of Daily Mirror Newspapers] bought the Odhams Press, they hardly realised they had got it," he says. "He bought it for the magazines, not for the People. But that's how there came to be two mass-circulation papers in one stable. It's never been resolved."

Ironically, one Trinity Mirror insider notes the People probably feels as secure today as it has for years. Twelve staff have gone and other changes are being made to create a saving of £1m a year, but management has promised that will be ploughed back into promotions. "There is this commitment to the future," the source says. But for the People and Sunday Mirror to be in the same company is a strange situation.

While having the two tabloids as rivals is unhelpful, closure makes little sense as the People shares costs and overheads with its national stablemates. Neither is it certain that the Sunday Mirror would win the People's readers if it did close. The Sunday Mirror is not heading in the same upmarket direction carved out recently by The Mirror under Piers Morgan. But Tina Weaver, who was appointed Sunday Mirror editor when Colin Myler was forced out after an article in the paper halted the Leeds United footballers' trial, has certainly made it a sharper, newsier read. Richard Stott, a former editor of both the People and The Mirror and now a Sunday Mirror columnist, says: "It has got much more steel to it than it had before."

And what of The Mirror itself? Piers Morgan, its editor, has won approving headlines of late, but that is only to be expected when a tabloid editor declares the end of the cult of celebrity and says serious news is the way ahead. With the passion of the born-again hard news man, Mr Morgan told a conference in the autumn: "I hear Mirror secretaries talking about anthrax, not EastEnders; Bin Laden, not Robbie Williams. There is a sudden and prolonged hunger for serious news."

Although the events of 11 September confirmed this line of thinking, it was in fact a strategy already emerging from the work being carried out by Mr Sinyor and the team from management consultants McKinsey, which has been studying every aspect of the Trinity Mirror business. But will The Mirror's move upmarket work? Piers Morgan appears to mean business and, though The Sun still sells one million more, he has been encouraged by recent circulation figures. Among the ideas touted for future development is dropping the traditional red masthead in a signal that the title is distancing itself from the downmarket "red-top" tag – and, more significantly, from The Sun.

But the City is sceptical. "The man who buys The Mirror isn't buying it for informed reflection. Morgan's moving it away from his target audience," one analyst says. "There's a growing middle-class, and one of The Mirror's problems is it's a victim of that. When people feel they have made it into the middle class they show that by changing their reading."

Some analysts believe there is scope for greater co-operation on advertising between the nationals and Trinity Mirror's successful regional titles. But most see the key to improved fortunes as investment in the flagship national titles. Underinvestment has been the norm in the past and the City is not convinced that will change.

Savings were identified by the review team, but there have been few details about how Trinity Mirror plans to reinvest them. With sales in the popular market on a long-term downward trend, even aiming to steady them means swimming against the tide. "They have got to reinvigorate their main brands," the City analyst says.

Brands, of course, are Joe Sin-yor's speciality, after a career embracing Pepe jeans, Dillons book- stores and Sony. If he can pull off the reinvigoration the City wants, the prize could be the chief executive's post in place of Philip Graf. While much liked as a regional press boss, Mr Graf is deemed to have failed to make a dash when Trinity moved into the more cut-throat national market.

Yet not everyone is convinced Joe Sinyor can succeed. "He is an ex-McKinsey man and he will produce something [on Thursday] full of buzz words about acting their size and using their scale," one analyst says. "And precious little will happen. The real problem is the strength of the competition – it's pretty difficult to beat The Sun."