Reader’s Digest has been sold by Better Capital for a nominal sum nearly four years after the private equity fund bought it out of administration.
The move comes days after the monthly magazine revealed sales for the second half of 2013 down 23.7 per cent to an average of 186,802. Some 89.3 per cent of this were paid-for copies. Back in 2000 Reader’s Digest UK was selling more than one million copies a month.
In January 2013 Reader’s Digest sacked 95 out of 120 staff after it closed its retail business.
The magazine went into administration in 2010 because of a £125m pension fund deficit. Under a Voluntary Company Arrangement with creditors, Better Capital was able to take on the business without the pension debts.
Better Capital is believed to have paid £14m for Reader’s Digest and then invested a further £9m.
The magazine has been bought by venture capitalist Mike Luckwell who was formerly a major shareholder in Carlton Communications and WPP and went on to invest in Bob the Builder TV company HIT Entertainments.
The Telegraph reports that Luckwell plans to expand Reader’s Digest into financial services to emulate the success of Saga.
He told the paper: “Saga is a gigantic company and I wouldn’t mind a few of their crumbs.”
Saga offers a range of products aimed at the over 50s and its monthly magazine had an average sale of 488,074 in the second half of 2013 (down 17.4 per cent year on year).