Bertelsmann formally disbands its book club division 'Direct Group'

Bertelsmann formally disbands its book club division 'Direct Group'

Bertelsmann has disbanded its Direct Group division having all-but completed what it described as the scale-back of its book clubs business. Its remaining book club interests, most notably in Germany and Spain, will now be run out of "Corporate Investments", a division that also includes BMG’s music rights business, as well as the Bertelsmann Digital Media Investments.

Once a significant and attractive part of Bertelsmann's operations the company has sold off its book clubs in the US, the UK, and most recently in France. Last week, The Bookseller reported that it was to open to the public all of the retail stores operated by its ailing German book club operation Der Club. Previously the group allowed only members into the chain, a strategy which impacted a limited number of branches. From 1st July all shops will be open to the public.

The group says that it is continuing to look at strategic options, including a possible disposal, for the Eastern European  book distribution business in Russia, Ukraine, the Czech Republic and Slovakia.

Hartmut Ostrowski, chairman & c.e.o. of Bertelsmann, said: "As part of our strategy to improve the growth profile of Bertelsmann, we have gradually sold off Direct Group’s international operations since 2008. We reached another milestone with the divestment of the businesses in France, after having sold a number of other businesses earlier. The decision to reorganize the remaining club businesses completes the scale-back of Direct group, and thus concludes a large strategic task."

Fernando Carro, c.e.o. of Direct Group, will continue to be responsible for Direct Group within the "Corporate Investments" department. He will also take on additional responsibilities in the group, including in the development of growth opportunities in Central and South America, and Spain.