The new owner of Reader’s Digest said he believes he can take the magazine into profit within ten weeks and says he has ambitions to restore the title to its former glory in the UK.
It was announced on Friday that Better Capital had sold Reader’s Digest to Mike Luckwell for a nominal fee. Better Capital itself bought the title out of administration in 2010 after a pension fund deficit of £125m nearly forced it out of business.
In the last six months of 2013 Reader’s Digest circulation dropped 23.7 per cent to an average monthly sale of 186,802. This compares with an industry average drop in circulation of around 6 per cent year on year.
Better Capital paid £14m for Reader’s Digest in 2010 and then invested a further £9m in the business.
Luckwell, who made his money in broadcasting, told Press Gazette: “It’s a relatively small company. Better Capital did quite a good job in taking remedial action with the company.
“Now it is smaller it does not fit in with the Better Capital portfolio. I’m going to take a small company approach and that is somewhat different.”
He said: “There’s a tremendous opportunity. At its height it had a circulation of 1.7m, it now stands at less than a quarter of a million – there is an opportunity there to increase circulation.”
Luckwell said he wants to see more focus on the website, noting that 70 per cent of its target market of over-50 readers are online.
He also has ambitions to revive the retail arm of Reader’s Digest, which was closed by Better Capital last year as part of changes which saw it cut 95 staff.
Today Reader’s Digest has a staff of 25, of which seven are in editorial.
Luckwell said: “I would like to revive the product sales, I think there’s tremendous potential there. Reader’s Digest also has a financial services subsidiary and that is something I would like to develop quite quickly.
“Looking at Saga I’d be very glad to have some of the crumbs from their table.”
Asked how far Reader’s Digest was from reaching break-even, he said: “It’s extremely close. I’m confident that we will make a profit within the next two and a half months.”
As to whether further jobs will be cut, he said: “I’m looking to expand the Reader’s Digest and that might have a favourable impact.”
He said that he plans to keep the editorial tone and said: “The general demeanor of the magazine will remain very much the same, I think it would be at my peril to change that.
“I’m not a publisher, I’m a businessman. Reader’s Digest is still the world’s biggest magazine and it should be restored to some of its former glory in this country.
“There has been a relentless decline in circulation which has been far greater than the industry average. That says to me that there has been something wrong with the way it has been managed.”