Reader's Digest Cuts 100 Jobs, Restructures Books, Entertainment Segment
The BHE segment will eliminate an unprofitable catalog business and reduce its direct mail campaigns and mail volume, the company said. For fiscal year 2003, it expects to reduce BHE's mail promotions 40 percent.
The restructuring is being done to significantly trim operating losses, which began in late fiscal year 2001 and worsened in fiscal year 2002. The company said it will exit the video business, except for children's videos and reduce some continuity series and general books. It also will consolidate two business units, Health and Home, as it initiates new marketing campaigns, including an expanded "health affinity" publishing program that doesn't use sweepstakes promotions.
Officials are eyeing other non-sweepstakes direct mail, direct response television and telemarketing to expand the company's marketing efforts. Areas of emphasis include Reader's Digest Young Families, Select Editions, Financial Services, annuals, music sold through DRTV and trade publishing. The company said it wants to develop new products for sale directly through Books Are Fun, its fastest growing display marketing unit.
Reader's Digest also wants to leverage any benefits from its pending acquisition of Reiman Publications, which publishes magazines, books and a catalog about cooking and country lifestyles. Officials think Reiman's customer base includes millions of potential prospects for its products that have no relationship with Reader's Digest. That deal is expected to close before June 30.
The company said it will take an undisclosed restructuring charge for the move. The Reader's Digest Association is based in Pleasantville, NY. Reiman Publications LLC is based in Greendale, WI.