Comag, which was founded in 1977 and is jointly owned by Hearst UK (65%) and Condé Nast (35%), fell to a £3.99m loss last year according to company accounts.
Hearst UK fell to a £5.4m loss, according to 2015 accounts, and at the time Carey attributed this to a writedown at Comag and that the magazine publisher’s core media business had not suffered.
Sources said Hearst would still be "committed" to print and the company would seek another distribution arrangement.
The vast majority of Comag’s £183m turnover comes from the UK, with about £30m coming from countries abroad.
As of the end of 2015 there were 263 people employed at Comag, all of whom could face redundancy.
Hearst and Condé Nast sold the North American division of Comag in 2012 to Vancouver-based Jim Pattison Group.
David Carey, the the US-based president of Hearst Magazines, decided that the company's UK chief would no longer have responsibility for Comag when he took up the role in February. James Wildman, the former chief revenue officer of Trinity Mirror who took the role, succeeded Anna Jones.
A joint statement by the two companies said: "Hearst UK and Condé Nast Britain have decided to withdraw from the jointly-held magazine distributor, Comag.
"As a result, Comag will be consulting with its staff and will also remain in close contact with its clients and suppliers.
"The shareholders are committed to this being a thorough, well-managed process for all parties."