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Tuesday, February 19, 2013

Holding Co of Reader's Digest files bankruptcy


That logo is unmistakably popular… in younger days, reading a copy was associated with knowledge and those reading were considered a class in their own. It was costly, but second hand books on platforms still sell as hot cakes.  Its Indian edition was first published in 1954 and its circulation reportedly was 40,000 copies. Today, the magazine is published in India by Living Media India Ltd., and sold over 600,000 copies monthly in 2008. It prints Indian and international articles.  Now it reportedly has readership of 3.94 million ~ it is the Reader’s Digest.

Reader's Digest is described to be  an American general interest family magazine, published monthly (except for a short period between 2010 and 2012 when the American edition was published ten times per year).  Formerly based in Chappaqua, New York, its headquarters is now in New York City. It was founded in 1922, by DeWitt Wallace and Lila Bell Wallace. For many years, Reader's Digest was the best-selling consumer magazine in the United States, losing the distinction in 2009 to Better Homes and Gardens. According to Mediamark Research, it reaches more readers with household incomes of $100,000+ than Fortune, The Wall Street Journal, Business Week andInc. combined.  It is available globally in more than 70 countries, with 49 editions in 21 languages.

It is in news not for any of the great traits described above, but for wrong reasons !

Sad because of the news that the owners have filed for bankruptcy for the second time in less than four years, citing a greater-than-expected decline of the media industry. RDA Holding Co and more than two dozen affiliates filed for a pre-negotiated Chapter 11 bankruptcy plan the company says will allow it to reduce its $534 million debt load by 80 percent, according to documents filed Sunday in US Bankruptcy court in the Southern District of New York.  Its international operations are not part of the filing. It is the second time the company filed for bankruptcy protection since 2009.

Executives at Reader’s Digest must be hoping that the magazine’s second trip to bankruptcy court in under four years will be its last. This week’s filing is the latest effort by the 91-year-old publisher, whose magazine once resided on many American coffee tables, to fix itself in a difficult economic environment. “After considering a wide range of alternatives, we believe this course of action will most effectively enable us to maintain our momentum in transforming the business and allow us to capitalize on the growing strength and presence of our outstanding brands and products,” Robert E. Guth, the company’s chief executive is quoted as stating.  ,

The earlier filing for bankruptcy in 2009, emerging a year later under the control of lenders like JPMorgan Chase. That reorganization substantially cut the publisher’s debt, and afterward the company worked to further shrink its footprint. It jettisoned nonessential publications in a series of deals; most of the money from those transactions went to pay down a still significant debt burden.

Somehow the very thought of closure of a book like ‘Reader’s Digest’ makes a sad reading…

With regards – S. Sampathkumar.
19th Feb 2013.

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