Monday, 7 January 2013
Readers Digest to propose a CVA
John Moulton's Better Capital has withdrawn funding for Readers Digest UK Limited and has had to make 90 of its marketing staff redundant.
In an announcement to the Stock Exchange they said they have; "entered a period of restructuring via a proposed Company Voluntary Arrangement or CVA.
The objective of the restructuring is to allow a smaller, profitable business based around the magazine to continue to trade whilst facilitating an exit from unprofitable direct marketing activities. The proposed CVA process is expected to take some weeks to conclude."
Better Capital bought the business out of administration with a promise to return it back to its former glory however it was soon apparent that despite large cost cutting there was a bigger decline than expected in its sales of CDs, DVDs and books.
Reader's Digest had around two million readers in its 1990s heyday, but its circulation has fallen to under 400,000 recently and many magazines are distributed for free.