‘Reader’s Digest’ files for bankruptcy

If this were fiction, it would be a rattling good yarn: An ailing publishing company set up with humble expectations in the aftermath of the First World War becomes a worldwide phenomenon, quickly capturing the global market for literature in a hurry.

Almost a century later, it is on its knees, a victim of technology and indifference, and it files for bankruptcy, fuelling expectations that it would soon be confined to the paper shredder of history.

But this riches to rags story has more twists than a breakdancer and, in true Hollywood fashion, it rises from the ashes. Just like Mark Twain, news of its death had been greatly exaggerated.

Readers digest filing for bankruptcy. It used to be a fad having that little mag in ones home.

— Godfrey Gowoka (@GodfreyGowoka) February 18, 2013

Or maybe not. It looks like the loveable and readable Reader’s Digest is about to go under for real this time.

RDA Holding Co, publisher of the 91-year-old magazine, filed for bankruptcy to cut $465m (e348m) in debt and focus on North American operations as consumers shift from print to electronic media.

Not to sound like an old man, but I subscribe to @readersdigest. It's sad to see them file for second bankruptcy http://t.co/grJYGx5S

— Bob Confer (@bobconfer) February 18, 2013

The company filed for what is known in the US as Chapter 11 bankruptcy protection.

It also did so back in 2009 in the midst of a drop in advertising and circulation, but emerged from bankruptcy in early 2010.

RDA Holding Co says it will keep publishing during the bankruptcy and it aims to be out of Chapter 11 within six months.

The New York company said it plans to cut its debt load by 80% during the restructuring, leaving it with about $100m in debt.

That is the kind of drama that would have appealed to the monthly magazine’s founder DeWitt Wallace as he lay on his bunk in a hospital in France in 1917 during the Great War.

Half his battalion had been killed and Wallace was hit with shrapnel in the neck, nose, abdomen, and lungs. He filled his time in the hospital bed by reading US magazines. The writing style at the time was Victorian, long-winded, and turgid.

Having spent months in the company of men less educated than himself, he conceived the idea of rewriting well-known books and articles, shrinking them in length while retaining as many of the author’s original words as possible.

He came to the conclusion that most could be shortened by at least 75% without losing their flavour or meaning.

By the time Wallace returned to the US in 1919, he had perfected the technique of “condensing” popular literature.

It worked a treat and within a decade the Reader’s Digest was being digested all over the world, becoming a staple diet for office workers, housewives, and those unfortunate enough to be stuck in a doctor’s waiting room.

It is now read in more than 170 countries and 17 languages, reaching about 100m readers.

So, will the venerable RD bite the dust this time?

The chances are that you may have to wait to find out in the next edition of one of the world’s most read monthly magazine.