The AP has obtained a letter to Direct Group employees from Bertelsmann chief executive Hartmut Ostrowksi that admits “we have decided to initiate the sale process for our [book and music club] businesses” in the UK, Australia and New Zealand, plus the Czech Republic, the Netherlands and Flanders (Flemish-language in Belgium), Poland, Russia, Slovakia and Ukraine. At least for now the company intends to retain Direct Group units in German and French-speaking countries, plus Spain, Italy, and Portugal. (Note that the French media recently reported the hiring of Morgan Stanley to elicit offers for the Direct Group division.) AP
Book Clubs
A Buyer for Direct Group NA
The answer to the question “who would want to buy that?” Phoenix-based investment firm Najafi Companies has bought Bertelsmann’s North American Direct Group assets, which include their family of book clubs along with Columbia House. The sale is expected to close in the third quarter and financial terms were not disclosed. (It was subsequently revealed in Bertelsmann’s annual report that the sale “generated proceeds of €19 million,” and Bertelsmann recorded a capital loss of €-18 million.) CEO Jahm Najafi says in the announcement, “We are very excited to enter the direct-to-consumer business and to work closely with Direct Group North America’s […]
Papers Say Direct Group France Sale Planned
Le Figaro and Les Echos have reported that Bertelsmann is working with Morgan Stanley to elicit offers for the Direct Group France division, which comprises both book clubs and the France Loisirs bookstore chain. One paper estimates the group could sell for 300 million euros, and the business newspaper says the sale could begin in September. But a spokesman for Bertelsmann said that no decision has been made yet, adding that “the news over the timing and the price are pure speculation.” Reuters In a broader story, FT Germany says the Bertelsmann has decided to sell off the Direct Group […]
Bertelsmann Makes China Pullback Official
Following previous reports in the Chinese press, Bertelsmann officially announced the termination of its book club business in China on July 3. That decision came two weeks after the announced closure of all of the company’s 36 franchised retail bookstore chains in 18 cities in China. A Chinese analyst tells Interfax: “Chinese customers are more sensitive to price when purchasing books, but Bertelsmann’s book club model has failed to provide enough discount compared to its competitors, such as Joyo and Dangdang. What’s more, Chinese consumers are becoming more and more used to online purchasing but Bertelsmann, on the other hand, […]