Loss-making 'Punch' magazine closes for the second time

A dwindling band of readers has forced the closure of the satirical magazine Punch 161 years after its first issue.

Its owner, Mohamed Al Fayed, announced the closure yesterday following mounting losses as subscriptions fell to fewer than 6,000. It is the second time that the magazine has closed in 10 years.

After four years out of print, Mr Fayed injected £3m into the magazine in 1996 but yesterday he had to admit that the magazine was no longer a going concern. He said yesterday: "I have done everything in my power to keep Punch alive by pumping in massive amounts of cash.

"But as a businessman, sometimes the head has to triumph over the heart and it is therefore with great regret that I have decided to close."

The first edition of Punch was published on 17 July 1841 and the magazine developed a reputation as a "defender of the oppressed and a radical scourge of all authority".

At its peak, it was one of the most popular magazines in Britain but by the late 1980s circulation had dropped to an alarmingly low level and Punch was closed in 1992 after notching up annual losses of £1m.

Despite the Fayed millions, problems began almost immediately, with the editor Peter McKay sacked only a couple of months after the relaunch. He lost his job for writing columns in the Daily Mail.

The magazine failed to re- establish the position it held in its glory days and was hardly able to muster a challenge to its far sharper and more successful competitor in the satirical market, Private Eye.

With so few sales and with each edition costing more than £40,000 to produce, Mr Fayed decided it was no longer commercially viable to continue publishing it. "Punch is a British institution. I was immensely proud when I was able to revive the magazine after four years of absence," he said.

"However, the warmth with which many people welcomed the return of Punch has not been reflected in sales. It simply no longer makes commercial sense to keep an ailing publication afloat indefinitely," he said.

The 12 members of the magazine's staff were told of the closure yesterday afternoon. Eight will be made redundant and four will be retained to work on the website and archive, which has a library of 500,000 cartoons.

"I feel sorry for the team at Punch, all of whom have immersed themselves totally in making a success of the magazine. It is a very sad day," said Mr Fayed, the Egyptian billionaire who has gained a reputation for refurbishing or salvaging British institutions.