Reader’s Digest UK closes its book business

Reader’s Digest UK closes its book business

Reader's Digest UK will no longer produce or sell books, following a restructuring of the business via a Company Voluntary Arrangement (CVA) initiated on Friday (4th January) by owner Jon Moulton’s private equity firm Better Capital.

Staff at the business’ book divisions are among a total of 95 employees who have been made redundant.

In a statement, Better Capital said the restructuring would "focus the business on the profitable magazine activity whilst moving away from the loss-making direct marketing sector". On top of the redundancies, a further restructuring of "certain other liabilities of the business" is planned. However, Better Capital said that Reader’s Digest magazine is a "viable arm of the business" and will "continue to be published and distributed as normal".

The statement attributed the move to "a faster than expected decline in the business's direct marketing sales of CDs, DVDs and books" which "continued to make trading difficult". It continued: "Despite very significant progress in the operation of the business and improved customer satisfaction, no easy route to long term viability for the direct marketing business exists. Significant funds have been injected without adequate return."

A spokesperson for Reader's Digest said: "Regrettably Readers will no longer produce or sell books as a result of the restructuring of the business. As of last Friday, book buying operations and orders have ceased, but existing orders will be honoured provided goods are in stock. Staff in these divisions are among the 95 redundancies announced."

Better Capital acquired Reader's Digest UK out of administration in April 2010.

The CVA process is expected to take several weeks.