Payne, who left last week, is understood to have been ousted by Kevin Beattie, managing director of Loot's owner, Associated Newspapers, after a disagreement over the brand's strategy. Beattie joined Associated as managing director this August, having moved from Northcliffe Newspapers.
Associated Newspapers' classified ads director, Sally Winfield, will replace Payne and faces the task of rebuilding Loot's circulation, which has slumped from 147,000 copies a week in January to 125,000 copies in September.
Payne was poached by Associated last June from the Financial Times, where she was advertisement director.
An associated spokesman confirmed that Payne had been replaced by Winfield, but refused to comment further.
The publisher has made two attempts to relaunch in the past few years. Earlier this year it earmarked £1m to overhaul the paper. Initiatives included the appointment of Jo Earl to the new role of marketing director and a revamp of the Loot website.
Last month, Loot began a direct marketing drive to support the activity. The work included a mailing featuring images of products that might be advertised via Loot. The pack, created by Liquid Communications, was sent to prospective and existing advertisers in the South-East.
In April 2002, Loot hired advertising agency Wieden & Kennedy to handle its £1m advertising account, briefing it to move perceptions of the brand beyond its reputation as a source of cheap flats rentals and cars.
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