Heading Towards Bankruptcy, Reader’s Digest is Looking Forward to Grow Further
It's been decades that Reader Digest has come into existence but now its private equity owners have dragged its 91-year-old publisher into bankruptcy. With emergence of internet libraries and electronic media, most of the costumers have shifted their idea of reading books to online reading.
Due to lower sales and ever shrinking advertising revenue, there has been a $465 million debt towards the company.
Its not only Readers Digest that has been facing bankruptcy recently; along with it there exist many other reputed brands. These include Hostess Brands Inc., maker of Twinkies and Wonder Bread, and bankrupt Eastman Kodak Co., inventor of Kodachrome film and Instamatic cameras.
It was in 1990 when Reader's Digest was first founded by DeWitt and Lila Wallace. Then in 2007, it was bought by an investor group led by private-equity firm Ripplewood Holdings LLC for $1.6 billion.
And today, the brand seems to have a debt of about $800 million. It was in August 2009 when for the very first time, the company filed for bankruptcy. There was a plunge in its advertising and the debt sustained in its acquisition also experienced a slash down.
Van Conway, chief executive officer of turnaround management firm Conway Mackenzie Inc., said in a telephone interview, "The brand will carry on, and that name has value".
New Zealand News
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