Reader’s Digest on brink of collapse

Reader’s Digest is on the brink of going in to administration today after a funding deal for its pension scheme failed.

The magazine’s US parent company has released a statement warning that it may be forced to put its UK business into administration within the new few weeks, unless it can secure a last-minute funding deal.

Reader’s Digest Association said the UK Pensions Regulator is to blame for failing to sign off a deal on its UK pension fund deficit.

The company is thought to be struggling due to declining ad revenues, despite being the most widely read publication in the world.

In the 1990s, Readers Digest was the best-selling magazine in the UK with a circulation of 2 million copies.  However, its total has slipped down to around 500,000 now due to stiff competition from new magazines on the market.

The US operation filed for bankruptcy last August but was hoping to re-emerge with a new business structure over the coming weeks.

However, the company will now be forced delay its emergence from Chapter 11 bankruptcy protection due to the situation in the  UK.

The group said: “In light of this unexpected ruling, the UK entity is now reviewing its options in an attempt to find a solution.”

Reader’s Digest employs 135 staff across its London and Swindon-based offices.  The company’s pension fund also has 1,600 members.

The firm publishes 92 magazines, which include 50 editions of Readers Digest, and runs websites selling books and music.