Reader's Digest filing Bankruptcy to condense debt

The publisher, of the world famous family magazine Reader's Digest, announced that it will file for Chapter 11 bankruptcy protection to reduce its mounting debt. According to the New York Times report, the 88-year-old company has fallen pray to US$2.2 billion debt and hence has agreed to file for bankruptcy to slash down its debt to around US$550 million.

Reader's Digest is one of the largest selling magazines in the world, which was co-founded by Lila Bell Wallace and DeWitt Wallace in 1922 and based in New York. At one point of time, it had claimed around 130 million readers across 78 countries. But since 2005, the company had been under snowballing debt due to which it suffered a 18.4 percent fall in ad revenue in 2008.

The economic slowdown and availability of free internet news are amongst the causes that have affected its falling advertising revenue. The company has also announced that it will reduce its frequency of publishing from 12 times to 10 times a year, because of a 7.2 percent drop in ad revenue in the first six months of this year.

Reader's Digest has always been a must-have in the middle class living rooms. One of the reasons behind its popularity was the variety of the topics that it covered - famous people, inspiring stories, money-saving tips, crossword, jokes and much more.

Let us hope that we can continue to cherish Reader's Digest for a longer period of time.