When Reader’s Digest agreed in March to buy magazine publisher/cataloger Reiman Publications, Reiman senior vice president of marketing John LeBrun made it clear that its Country Store catalog would not be merged with Reader’s Digest’s Good Catalog Co./Gifts.com business.
There’s a simple reason for that: Good Catalog/Gifts.com is up for sale.
“We sent out some feelers to potential strategic investors and have had some interest,” confirms Gifts.com president Ralph Pinto. He would not elaborate, but at least one source says that Reader’s Digest had started peddling the business to several parties last year.
Reader’s Digest bought gifts marketer Good Catalog Co. in October 1998. The Pleasantville, NY-based magazine and marketing conglomerate then brought Good Catalog under the same management as that of its Gifts.com catalog and online business. (Although Reader’s Digest is the majority owner of Gifts.com, Denver-based holding company Star Tech owns a 20% share.)
Sources say that, following a sales decline last year, earlier this year the Good Catalog staff was downsized to some 20 people. At its peak in the late 1990s, Good Catalog had nearly 90 employees.
The feeling at Reader’s Digest, according to several sources outside the company, was that the Good Catalog acquisition was a mistake. Good Catalog and its sister book, Good Finds, target affluent men with an average income of more than $80,000; the average price is more than $500, Pinto says. He describes Gifts.com as a “more traditional” gifts business appealing to women, with an average price point of $100-$150.
Then again, sales at Good Catalog/Gifts.com have reportedly picked up this spring. “The numbers have actually gotten quite good,” says one source. Partnerships with American Express, Diner’s Club, and Discover, in which Good Catalog books were mailed to those company’s cardholders, have helped the division rebound.
What about Reiman?
Some might wonder why Reader’s Digest would be looking to sell its existing catalogs even as it has acquired another: Reiman’s Country Store title.
But at $20 million-plus in annual sales, Country Store is a small part of the total Reiman package. Most of Reiman’s more than $300 million in annual revenue comes from its magazines, which include Taste of Home and Country Woman.
Besides, Country Store “is all about affinity with Reiman magazine readers,” a source points out. In addition to the catalogs that mail mostly to Reiman magazine readers, miniature versions of Country Store are polybagged in most Reiman magazines.
Furthermore, Greendale, WI-based Country Store appeals to a significantly less affluent and more rural audience than Good Catalog/Gifts.com. Any synergies in terms of circulation would be highly unlikely.
Reader’s Digest’s purchase of Reiman, for $760 million, is expected to close in June.