Just 12 months ago, Reader’s Digest UK was sold by Jon Moulton’s Better Capital to Mike Luckwell for £1. The magazine has had new life breathed into it and been given an intoxicating appeal to a new generation of the ‘frisky 50s’.

Reader’s Digest UK had made losses totalling £30m prior to its acquisition. Following the change of ownership, further working capital had to be injected to keep the company going.

The company then underwent restructuring and a rapid turnaround. Reader’s Digest’s operations were merged into a group being built up specialising in the over-50s market, and benefited from being able to share a common infrastructure and overhead. Within 60 days, Reader’s Digest had moved from loss to profit and became cash positive. By the time 90 days had elapsed, the initial capital injection had been returned to the new owner, and the operation continues to be profitable.

A new editor, Tom Browne, was appointed. Tom says: “This was a fascinating challenge. I had to strike a balance between giving the magazine an updated look and feel while maintaining its appeal to its core audience. I also took over the online editorial content, which is so essential to the future success of Reader’s Digest, and I’m delighted with the result to date.”

As with virtually all publications, Reader’s Digest subscriptions and circulation are falling, but a revamped magazine and website, with greater emphasis on advertisers’ requirements, means that advertiser revenue has actually increased. Advertisers have been very receptive to the new initiatives and the different advertising concepts being introduced. These have been supported by a strong IT infrastructure able to work with advertisers on database exploitation and segmentation. This particularly applies to the Financial and Health Sectors, who find the Reader’s Digest demographic ideal for their products and services.

In addition, the Reader’s Digest website has been dramatically improved.  Under the previous ownership Online had largely been ignored.  It was quickly recognised that the future of the magazine lay with Digital growth. The over-50s today are computer literate, and many print subscribers have turned to the website which additionally attracts a younger audience than the magazine.

Reader’s Digest Chairman, Mike Luckwell, says “Reader’s Digest is a strong brand and a household name.  It now reflects the needs of the modern ‘Frisky 50s’, an ambition from the start. I’m delighted that this acquisition has been a financial success.  Appointing Tom Browne as Editor has proved to be a great choice and I admire his input, particularly on the website.  We also have an excellent management team in place.  The challenge ahead is creating a new business model less dependent on print and more focused on digital.  During this year we also acquired MovieMail and are currently looking at a number of other companies catering to the over-50s.”

 

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