The Reader's Digest Association began its magazine expansion a few years after Lila Wallace's death in 1984. The magazine's revenues accounted for 31 percent of the company's overall revenues of $2 billion, with the remainder coming from operations like book publishing, records and videotapes, as well as other magazines. Last year the magazine had operating profits of $75 million on revenues of $623.9 million, 70 percent of which came from circulation. Reader's Digest has a worldwide circulation of 28 million, with 40 editions printed in 16 languages.
With a circulation of 16.4 million, it is the second-largest magazine in the United States, topped only by Modern Maturity, the magazine of the National Association of Retired Persons. The juiciest plum is still Reader's Digest, which was started by the Wallaces in a Greenwich Village speak-easy in 1922 with a $5,000 loan. In this marketplace, there are only a few cash-rich companies, and Reader's Digest is one. "The indications are that they want to be a player. "The sleeping giant is emerging," said Paul DuCharme, a senior vice president at Grey Advertising. And it is using its multimillion-name mailing list to build those magazines. Long dependent on Reader's Digest, one of the best-read publications in the world, the company has been buying up specialty magazines and starting others.
The change in management has brought about an aggressive new effort to bring growth to the Reader's Digest Association Inc. (No more turkeys at Thanksgiving.) Then last year, after 68 years as a privately owned company, Reader's Digest went public. Grune became chairman and chief executive and made it clear that paternalism would be replaced by profit orientation.
In 1984, after the deaths of the Wallaces, much of that changed. Spiritually and editorially driven by its founders, DeWitt and Lila Wallace, the association was a company where million-dollar art works hung in halls, employees received turkeys at Thanksgiving and nearly everyone benefited from the phenomenal success of Reader's Digest magazine. For decades, this 127-acre tract of neo-Georgian buildings and sprawling oak trees was the place where hundreds of employees of the Reader's Digest Association began their careers and stayed for the rest of their working lives.
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