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Reader's Digest to Sell Artworks Worth $100 Million

Publishing: Firm says divestiture of masterpieces is part of a strategy to use its assets more wisely.

September 16, 1998|From Reuters

PLEASANTVILLE, N.Y. — Reader's Digest is putting 39 works from its storied art collection--including paintings by Monet, Van Gogh and Chagall--on the auction block as part of a plan to shore up the struggling publisher.

Reader's Digest Assn. Inc. said in a statement that Sotheby's Holdings Inc. will auction the 39 impressionist, modern and contemporary masterpieces--valued at up to $100 million--in New York on Nov. 16 and 17.

Company Chairman Thomas Ryder plans to detail for analysts today a strategy that calls for cutting operating costs, selling underperforming assets and developing growth initiatives, the company said.

"Our art collection is truly part of the heritage of our company," Ryder said. "However, we can put the worth of these most valuable works to better and more effective use by investing in its growth opportunities for the company."

The company, with its general-interest magazine still a fixture on coffee tables across the country, said the pieces to be auctioned also include major works by Diebenkorn, Giacometti, Renoir and Modigliani.

Although the works represent the bulk of the extensive corporate collection's value, Reader's Digest will still own about 8,000 pieces of art, said company spokesman Stephen Morelo. He said the auction is not a fire sale.

The latest announcement comes on the heels of a global reorganization announced on July 27 as the first major initiative under Ryder's leadership. Morelo said the first phase of the corporate overhaul involved identifying ways to streamline company operations and naming executives to key posts.

The strategy to be announced today represents the second phase of the reorganization and will include substantive plans for strengthening the company and positioning it for growth, Morelo said.

Morelo said the Reader's Digest collection reflects the legacy of company founders DeWitt Wallace and Lila Acheson Wallace, who began buying art during the 1940s when the publishing giant was still a private company.

The company's stock rose 44 cents to close at $18.13 on the New York Stock Exchange.

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