Big consumer magazine
publishers continue to face serious headwinds, principally weakening print ad demand. This week RDA Holding Co., which owns The Reader’s Digest Association, announced that total revenues
decreased 22% to $290 million in the second quarter year-over-year.
Admitting that “our second quarter results were disappointing when compared to the year-ago period,” RDA President and CEO Robert E. Guth noted that “many of our European markets continued to struggle amidst a very difficult macroeconomic environment.”
The company’s total
European revenues declined 27% from $140 million to $102 million -- although the percentage decline would have been smaller if exchange rates remained stable.
In RDA’s North American businesses, the company suffered larger-than-expected declines in its books and home entertainment divisions.
However, Guth emphasized that the company is continuing to refocus on its
core businesses, including the recent sale of its Lifestyle and Entertainment Direct businesses, while simultaneously transitioning to a digital content model. RDA also sold Every Day with Rachael
Ray and food Web site AllRecipes.com to Meredith Corp. It publishes Taste of Home.
These and a number of other major changes, including executive reshuffles, were undertaken at the behest of the company’s new hedge fund owners, who took control of RDA in 2011 following its exit from Chapter 11 bankruptcy protection.
The shakeup continued last week with the surprise announcement that Dan Lagani, the chief of its North American operations, was leaving the company. Guth, who became overall CEO in September, is taking over direct responsibility for Reader’s Digest magazine, according to the New York Post.