RDA Holding Company, the publisher of Reader's Digest, has filed for Chapter 11 bankruptcy on Sunday. This is the second time in less than four years and the company hopes to reduce its debts by $465 million.
The journal, which was once a mainstay in doctors' surgeries and grandmothers' homes has been struggling to keep afloat in the digital era and not been able to cope with the shift from print to electronic media.
"We have had an ongoing process to simplify and rationalise our international business by licensing our local markets to third parties, to other publishers, to other investors," Reader's Digest boss Robert Guth said. "And that has been a big part of our effort to streamline the company and bring in proceeds to bring down debt."
The company had tried for survive on a lucrative subscription customer base. According to reports, the magazine has more than 26 million readers and sells more than 55 million copies in North America annually.
"The much more modest debt level puts us in a position to continue to really execute these plans and push these brands forward well into the future, so it's a very good new lease on life," Guth said. "The Chapter 11 process, which will facilitate a significant debt reduction, will enable us to continue to redefine our business by focusing our resources on our strong North American publishing brands, which have shown a new vitality as a result of our transformation efforts, particularly in the digital arena."
