Fresh turmoil at US Reader's Digest as boss is fired after just five months
It was the original " aggregator" and even today is the world' biggest-selling magazine . But the American Reader's Digest is still mired in a sea of troubles and looks set to offload businesses.
In an e-mail to staff, Guth wrote that as far as parts of the business that don't have market-leading positions were concerned, the New York-based company will "move on and no longer be distracted."
In April, Williams was moved up from CFO to replace Mary Berner. The company then reportedly hired investment bankers it to shop it to potential buyers but nothing has come of that (so far). These have been troubled years for the once all-powerful Reader's Digest, the original journalistic aggregator. Berner herself was brought on in 2007 to turn the troubled company around, Adweek magazine noted. Before she could achieve anything, the recession hit, leading to deep staff cuts. Next came "a prepackaged bankruptcy" and new owners. They included hedge funds Alden Global Capital and Point Lobos Capital. A new board was named in April. Guth, 48, was one of the new board members. His career in technology and telecom, includes four years as CEO of a telecom company. Following his appointment this week, he e-mailed staff acknowledging frustration with the recurring leadership changes and pessimism in the ranks. The Reader's Digest itself still sells 5.6 million in the US, but most of the company's revenue comes from magazines, books, music, and videos. Guth said the company has an “unbelievably strong core business” but that it wasn’t “performing to its potential” and that he was put in place to enact “significant changes. “I’ve asked many people within the company, ‘Is this a great business?’ Unfortunately, I have not heard nearly enough ‘Yes’ answers in response,” he wrote in the email. Then came his remark about parts of the business that "don't have market -leading positions." He didn't name names. For many years, Reader's Digest was the best-selling consumer magazine in the United States, until being overtaken by Better Homes and Garden in 2009. It still reaches more households with incomes of $100,000+ than Fortune, The Wall Street Journal, Business Week and Inc. combined. With a global circulation of 17 million, it is still the largest paid circulation magazine in the world with 50 editions in 21 languages. The British magazine, established in 1938, was bought out of administration by Better Capital, Jon Moulton's investment firm in April last year after a pension fund crisis meant the US parent was unable to support the UK operation. British Reader's Digest now has a licensing deal with the US company.