The $2.6 billion Reader’s Digest is “considering becoming a major player in the catalog business,” says vice president/general manager of catalog Jim Steffensen. To this end, the Pleasantville, NY-based magazine and book publisher/direct marketer bought multititle gifts and housewares cataloger The Good Catalog Co. in early October for an undisclosed sum-and more acquisitions are likely. “We’re following the catalog industry very closely as a potential source of acquisitions,” Steffensen admits.
Before acquiring the $30 million Good Catalog, Reader’s Digest already operated a $100 million catalog business selling books, videos, and music. Reader’s Digest agreed to buy Good Catalog on Sept. 16, the same day Reader’s Digest announced several moves to reduce costs and pursue growth opportunities.
Reader’s Digest and Good Catalog had been in discussions for six months prior to the deal, Steffensen says. During that time, Good Catalog test-mailed catalogs to segments of the more than 100 million-name Reader’s Digest database. “The tests confirmed that we have segments, particularly younger, more affluent women, that respond very well to Good Catalog,” he says. “This will give us a way to expand our product line to existing customers.”
Good Catalog president Barbara Todd, senior vice president of marketing Bill Nicolai, and the rest of the staff will remain with the cataloger; its headquarters will stay in Portland, OR. Todd and Nicolai are signed on to run the day-to-day operations through at least the end of 2000.
“When we started Good Catalog in ’92, it was our intention to sell the business between 1997 and ’99,” Todd says. “I felt that there would be a lot of changes in the catalog industry within five to seven years and that it would take more capital and resources to run this business by now. So now is a good time to have someone much larger than us own the company.”