Reader's Digest begins insolvency proceedings as it axes direct marketing division
Less than three years after Jo Moulton’s Better Capital private equity firm rescued the monthly magazine from administration, it has cut 90 of Reader’s Digest UK’s 120 staff as it axed the magazine's direct marketing division. The private equity firm also began insolvency proceedings of the magazine’s CD, DVD and bookselling arm.
Better Marketing said that no easy route to long-term viability for the direct marketing business exists and that it had already injected significant funds into the business "without adequate returns". It declined to tell the Guardian how much it had put in.
The direct marketing division has been placed into a company voluntary arrangement, a legal agreement that enables a company to write off some of its debts.
Better said the magazine was still trading profitably and would continue to be published and distributed as normal.