The publisher of Reader’s Digest, RDA Holding Co., has filed for bankruptcy after 91 years of publishing the classic magazine, according to The Associated Press. It is the second time the company has filed for Chapter 11 bankruptcy in four years.
The company is the latest in a line of iconic businesses to seek court protection from creditors, following Hostess Brands and Eastman Kodak.
Reader’s Digest has been in the process of balancing finances and innovation for the modern age. RDA seeks to cut $465 million in debt and focus on North American operations as consumers shift from print to electronic media. They were a content aggregator long before The Huffington Post, clipping features from other magazines and newspapers for its print edition. It’s effort to make the jump into digital relevance has required it to restructure financially.
“I see some news coverage has misconstrued the filing to mean that the magazine and core publishing brands are struggling,” Tom Becker, spokesman for Reader’s Digest, told The Daily Caller. “They are actually performing fine. The none-core businesses have been the issue, which is why the company is trying to focus resources on the core publishing brands, as well as reduce 80 percent of its debt.”
Becker also reported that digital copies on all of RDA’s American brands grew in 2012, and the Reader’s Digest app remains one of the top digital downloads among all platforms.
Digest has seen its share of negative sentiment coming from the tech sector, claiming that the aging brand does not have the niche that it once dominated. One of the companies main drivers is customer loyalty, but it is hard for younger generations to have that sense of loyalty when the brand doesn’t mean the same thing it did to one’s parents or grandparents.