Exploiting Reader’s Digest’s iconic brand is the latest strategy for its private equity owners, who put the 91-year-old publisher into bankruptcy to shed $465 million in debt as consumers shift to electronic media. 
 
 Like recently bankrupt Hostess Brands Inc., maker of Twinkies and Wonder Bread, and bankrupt Eastman Kodak Co., inventor of Kodachrome film and Instamatic cameras, Reader’s Digest has a potentially valuable name. 
 
 Reader’s Digest, founded by DeWitt and Lila Wallace, went public in 1990. An investor group led by private-equity firm Ripplewood Holdings LLC bought it in 2007 for $1.6 billion and the assumption of about $800 million in debt. The company filed for bankruptcy for the first time in August 2009, citing a drop in advertising and the debt incurred in its acquisition. 
 
 “The brand will carry on, and that name has value,” Van Conway, chief executive officer of turnaround management firm Conway MacKenzie Inc., said in a telephone interview. He said also that a company burdened by debt must “be nimble enough” to deal with the changing world of electronic readers. 
 
 RDA Holding Co. listed assets and debt of more than $1 billion each in Chapter 11 documents filed Feb. 17 in U.S. Bankruptcy Court in White Plains, New York. 
 
 Company officials “have embarked on an ambitious but necessary set of initiatives to transform the debtors’ core businesses around their iconic brands,” said Robert Guth, Reader’s Digest’s chief executive officer, in court papers. 
 
 Buffeted by Downturns 
 
 After the earlier bankruptcy, the company in 2010 “continued to be buffeted by economic downturns, domestically and internationally, and the accelerated shift from traditional print media and marketing to digital media and marketing, severely hampered the debtors’ ability to thrive,” Guth wrote. 
 
 Under a restructuring agreement supported by Wells Fargo & Co., $465 million of remaining senior notes will all convert to equity. The company expects to have about $100 million in debt when it exits Chapter 11, about an 80 percent reduction. 
 
 The Hostess bankruptcy was different in that its problems involved labor unions, while with Reader’s Digest, “there’s too much debt,” Conway said. “That doesn’t mean you couldn’t come out and be profitable” after bankruptcy, he said. 
 
 Among the company’s largest unsecured creditors listed in court papers were Luxor Capital Group of New York, listed as administrative agent for a $10 million loan, and the U.S. Federal Trade Commission, with an $8 million claim. 
 
 Ab Circle Pro 
 
 In 2010, the FTC started an investigation into the marketing of the Ab Circle Pro fitness product, sold by a Reader’s Digest subsidiary. As part of a 2012 settlement, the company agreed to pay as much as $23.8 million, with Reader’s Digest agreeing to be responsible for amounts due. 
 
 During restructuring, “We have had an ongoing process to simplify and rationalize our international business by licensing our local markets to third parties, to other publishers, to other investors and that has been a big part of our effort to streamline the company and bring in proceeds to bring down debt,” Guth said in an interview on Feb. 17. 
 
 The company’s flagship print magazine is read by more than 25 million people, according to its website. The company publishes 75 magazines globally including 49 editions of Reader’s Digest, Taste of Home, the Family Handyman and Birds & Blooms. Reader’s Digest “sold more digital editions in December than we did newsstand editions,” Guth said. 
 
 Meredith Sale 
 
 The company had some success in the sale of Allrecipes.com “but frankly haven’t had enough success on that front,” Guth said. Last year, Reader’s Digest sold Allrecipes for $175 million and Every Day with Rachel Ray for an undisclosed amount to Meredith Corp. 
 
 “The key message here is that we have a lot of confidence in the future of the business based upon the success of the ongoing operational transformation, but we haven’t had as much success with the balance sheet side of it and we need this process to help accelerate that,” Guth said. 
 
 “The much more modest debt level puts us in a position to continue to really execute these plans and push these brands forward well into the future, so it’s a very good new lease on life,” he said. 
 
 The company said it reached a pre-petition accord with its secured lender and more than 70 percent of its secured note holders. The bankruptcy was filed to implement the pre-arranged restructuring. 
 
 Reader’s Digest plans to borrow as much as $45 million in new financing from a group of secured note holders to help fund operations as it restructures, according to court papers. The financing is part of a $105 million facility and is open to note holders who agree to support the restructuring, according to a company statement. The company said its business won’t be interrupted and obligations to customers will be fulfilled. 
 
 North America 
 
 “The Chapter 11 process, which will facilitate a significant debt reduction, will enable us to continue to redefine our business by focusing our resources on our strong North American publishing brands, which have shown a new vitality as a result of our transformation efforts, particularly in the digital arena,” Guth said in the statement. 
 
 Hostess, previously known as Interstate Bakeries Corp., left an earlier bankruptcy in 2009 under the control of Ripplewood and lenders. The company, based in Irving, Texas, entered bankruptcy again in January 2012 after changes in American diets curbed sales as ingredient costs and labor expenses climbed. 
 
 Kodak, based in Rochester, New York, filed for bankruptcy in January 2012, and CEO Antonio Perez has been selling businesses to shrink the company and fund its shift into commercial printing and packaging. 
 
 International Operations 
 
 RDA’s international operations, including Canada, are not part of the filing. 
 
 “We aren’t the typical iconic American brand that’s challenged by conversion to digital,” Guth said. “We just had a complicated company that had to be simplified so that those iconic brands and those great customer relationships could thrive with continued emphasis on new formats and new audiences but with the same brand and the same products.” 
 
 The case is In RDA Holding Co. Inc., 13-22233, U.S. Bankruptcy Court, Southern District of New York (White Plains). The previous bankruptcy case is In Re Reader’s Digest Association Inc., 09-23529, U.S. Bankruptcy Court, Southern District of New York (White Plains). 
 
 To contact the reporter on this story: Dawn McCarty in Wilmington at dmccarty@bloomberg.net 
 
 To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net ||||| FILE- In this Aug. 26, 1948, file photo women's hats are pictured in a 1907 Sears Roebuck catalog from the shelves of the Chicago Public Library, in Chicago. Sears has filed for Chapter 11 bankruptcy... (Associated Press) 
 
 NEW YORK (AP) — Sears filed for Chapter 11 bankruptcy protection Monday, buckling under its massive debt load and staggering losses. 
 
 The question now is whether a smaller version of the company that once towered over the American retail landscape can remain viable or whether the iconic brand will be forced out of business. 
 
 Sears, which started as a mail order catalog in the 1880s, has been on a slow march toward extinction as it lagged far behind its peers and incurred huge losses over the years. 
 
 "This is a company that in the 1950s stood like a colossus over the American retail landscape," said Craig Johnson, president of Customer Growth Partners, a retail consultancy. "Hopefully, a smaller new Sears will be healthier." 
 
 Others don't share Johnson's optimism. 
 
 "That a storied retailer, once at the pinnacle of the industry, should collapse in such a shabby state of disarray is both terrible and scandalous in equal measure," said Neil Saunders, managing director of GlobalData Retail, in a note published Monday. "In our view, too much rot has set in at Sears to make it viable business." 
 
 The company has struggled with outdated stores and complaints about customer service even for its once crown jewels: major appliances like washers and dryers. That's in contrast with chains like Walmart, Target, Best Buy and Macy's, which have been enjoying stronger sales as they benefit from a robust economy and efforts to make the shopping experience more inviting by investing heavily in remodeling and de-cluttering their stores. 
 
 Sears Holdings, which operates both Sears and Kmart stores, will close 142 unprofitable stores near the end of the year, with liquidation sales expected to begin shortly. That's in addition to the closure of 46 unprofitable stores that had already been announced. Edward S. Lampert, the company's largest shareholder, has stepped down as CEO but will remain chairman of the board. A new Office of the CEO will be responsible for managing day-to-day operations. 
 
 The company said Monday it has secured $300 million in financing from banks to keep the operations going through bankruptcy. In addition, it's negotiating an additional $300 million loan from Lampert's ESL Hedge fund. 
 
 The filing listed between $1 billion and $10 billion in assets while liabilities range between $10 billion to $50 billion. 
 
 Sears joins a growing list of retailers that have filed for bankruptcy or liquidated in the last few years amid a fiercely competitive climate. Some, like Payless ShoeSource, successfully emerged from reorganization in bankruptcy court. But plenty of others like, Toys R Us and Bon-Ton Stores Inc., haven't. Both retailers were forced to shutter their operations this year soon after Chapter 11 filings. 
 
 Given its sheer size, Sears' bankruptcy filing will have wide ripple effects on everything from already ailing landlords to its tens of thousands of workers. 
 
 Lampert has been loaning out his own money for years and has put together deals to prop up the company, which in turn has benefited his own ESL hedge fund. 
 
 Last year, Sears sold its famous Craftsman brand to Stanley Black & Decker Inc., following earlier moves to spin off pieces of its Sears Hometown and Outlet division and Lands' End. 
 
 In recent weeks, Lampert has been pushing for a debt restructuring and offering to buy some of Sears' key assets, like Kenmore, through his hedge fund as a $134 million debt repayment came due on Monday. Lampert personally owns 31 percent of the company's shares, while his hedge fund has an 18.5 percent stake, according to FactSet. 
 
 Sears' stock has fallen from about $6 over the past year to below the minimum $1 level that Nasdaq stocks are required to trade in order to remain on the stock index. In April 2007, shares were trading at around $141. The company, which once had 350,000 workers, has seen its workforce shrink to fewer than 90,000 people as of earlier this year. 
 
 As of May, it had fewer than 900 stores, down from a 2012 peak of 4,000. 
 
 In a March 2017 government filing, Sears said there was "substantial doubt" it would be able to keep its doors open — but insisted its turnaround efforts would mitigate that risk. 
 
 Lampert pledged to return Sears to greatness by leveraging its best-known brands and its vast holdings of land, and more recently planned to entice customers with a loyalty program. But losses continued and the company struggled to get more people through the doors or to shop online. 
 
 Jennifer Roberts, 36, of Dayton, Ohio, was a long-time fan of Sears and has fond memories of shopping there for clothes as a child. But in recent years, she's been disappointed by the lack of customer service and outdated stores. 
 
 "My mom had always bought her appliances from Sears. That's where my dad got his tools," she said. "But they don't care about their customers anymore." 
 
 She said a refrigerator her mother bought at Sears broke after two years and still hasn't been fixed. 
 
 "If they don't value a customer, then they don't need my money," Roberts said. 
 
 Sales at the company's established locations tumbled nearly 4 percent during its fiscal second quarter. Still, that was an improvement from the same period a year ago. Total revenue dropped 30 percent in the most recent quarter, hurt by continued store closings. 
 
 "The problem in Sears' case is that it is a poor retailer," Saunders wrote in an analyst note last week. "Put bluntly, it has failed on every facet of retailing from assortment to service to merchandise to basic shop keeping standards. Under benign conditions, this would be problematic enough but in today's hyper-competitive retail environment it is a recipe for failure on a grand scale." 
 
 For decades, Sears was king of the American shopping landscape. Sears, Roebuck and Co.'s iconic catalog featured items from bicycles to sewing machines to houses, and could generate excitement throughout a household when it arrived. The company began opening retail locations in 1925 and expanded swiftly in suburban malls from the 1950s to 1970s. But the onset of discounters like Walmart created challenges for Sears that have only grown. Sears faced even more competition from online sellers and appliance retailers like Lowe's and Home Depot. 
 
 Store shelves have been left bare as many vendors have demanded more stringent payment terms, says Mark Cohen, a professor of retailing at Columbia University and a former Sears executive. 
 
 Meanwhile, Sears workers are nervous about what kind of severance they'll receive if their stores close. 
 
 John Germann, 46, works full-time and makes $14 per hour as the lead worker unloading merchandise from trucks at the Chicago Ridge, Illinois, store, which has been drastically reducing its staff since he started nine years ago. Germann now has only 11 people on his team, compared with about 30 a few years ago. 
 
 "We're doing the job of two to three people. It's not safe," he said. "We're lifting treadmills and refrigerators." 
 
 _____ 
 
 Follow Anne D'Innocenzio: http://twitter.com/ADInnocenzio ||||| FILE- In this Aug. 26, 1948, file photo women's hats are pictured in a 1907 Sears Roebuck catalog from the shelves of the Chicago Public Library, in Chicago. Sears has filed for Chapter 11 bankruptcy... (Associated Press) 
 
 NEW YORK (AP) — Sears has filed for Chapter 11 bankruptcy protection, buckling under its massive debt load and staggering losses. 
 
 Sears once dominated the American retail landscape. But the big question is whether the shrunken version of itself can be viable or will it be forced to go out of business, closing the final chapter for an iconic name that originated more than a century ago. 
 
 The company, which started out as a mail order catalog in the 1880s, has been on a slow march toward extinction as it lagged far behind its peers and has incurred massive losses over the years. The operator of Sears and Kmart stores joins a growing list of retailers that have filed for bankruptcy or liquidated in the last few years amid a fiercely competitive climate. Some like Payless ShoeSource have had success emerging from reorganization in bankruptcy court but plenty of others haven't, like Toys R Us and Bon-Ton Stores Inc. Both retailers were forced to shutter their operations this year soon after a Chapter 11 filing. 
 
 "This is a company that in the 1950s stood like a colossus over the American retail landscape," said Craig Johnson, president of Customer Growth Partners, a retail consultancy. "Hopefully, a smaller new Sears will be healthier." 
 
 Given its sheer size, Sears' bankruptcy filing will have wide ripple effects on everything from already ailing landlords to its tens of thousands of workers. 
 
 The filing, which is happening ahead of the crucial holiday shopping season, comes after rescue efforts engineered by its CEO and chairman Eddie Lampert have kept it outside of bankruptcy court — until now. Lampert, the largest shareholder, has been loaning out his own money for years and has put together deals to prop up the company, which in turn has benefited his own ESL hedge fund. 
 
 Last year, Sears sold its famous Craftsman brand to Stanley Black & Decker Inc., following its earlier moves to spin off pieces of its Sears Hometown and Outlet division and Lands' End. 
 
 In recent weeks, Lampert has been pushing for a debt restructuring and offering to buy some of Sears' key assets like Kenmore through his hedge fund as a $134 million debt repayment comes due on Monday. Lampert personally owns 31 percent of the company's shares. His hedge fund has an 18.5 percent stake, according to FactSet. 
 
 "It is all well and good to undertake financial engineering, but the company is in the business of retailing and without a clear retail plan, the firm simply has no reason to exist," said Neil Saunders, managing director of GlobalData Retail, in a recent analyst note. 
 
 Sears' stock has fallen from about $6 over the past year to below the minimum $1 level that Nasdaq stocks are required to trade in order to remain on the stock index. In April 2007, shares were trading at around $141. The company, which once had 350,000 workers, has seen its workforce shrink to fewer than 90,000 people as of earlier this year. 
 
 The company has racked up $6.26 billion in losses, excluding one-time events, since its last annual profit in 2010, according to Ken Perkins, who heads the research firm Retail Metrics LLC. It's had 11 years of straight annual drops in revenue. In its last fiscal year, it generated $16.7 billion in sales, down from more than $50 billion in 2008. 
 
 As of May, it had fewer than 900 stores, down from about 1,000 at the end of last year. The number of stores peaked in 2012 at 4,000, including its Sears Canada division that was later spun off. 
 
 In a March 2017 government filing, Sears said there was "substantial doubt" it would be able to keep its doors open — but insisted its turnaround efforts would mitigate that risk. 
 
 But its losses continued into this year. In the fiscal second quarter ended Aug. 4, net losses in the quarter swelled to $508 million, or $4.68 per share, compared with a loss of $250 million, or $2.33 cents per share in the same quarter a year ago. 
 
 Such financial woes contrast with the promise that Lampert made when he combined Sears and Kmart in 2005, two years after he helped bring Kmart out of bankruptcy. Back then, it operated 2,200 stores in total. 
 
 Lampert pledged to return Sears to greatness by leveraging its best-known brands and its vast holdings of land, and more recently planned to entice customers with a loyalty program. But it struggled to get more people through the doors or to shop online. 
 
 Jennifer Roberts, 36 of Dayton, Ohio, had been a long-time fan of Sears and has fond memories of shopping there for clothes as a child. But in recent years, she's been disappointed by the lack of customer service and outdated stores. 
 
 "My mom had always bought her appliances from Sears. That's where my dad got his tools," she said. "But they don't care about their customers anymore." 
 
 She said a refrigerator her mother bought at Sears broke after two years and it still hasn't been fixed for almost a month with no help from the retailer. 
 
 "If they don't value a customer, then they don't need my money," said Roberts, who voiced her complaints on Sears' Facebook page. 
 
 Sales at the company's established locations tumbled nearly 4 percent during its fiscal second quarter. Still, that was an improvement from the same period a year ago when it fell 11.5 percent. Total revenue dropped 30 percent in the most recent quarter, hurt by continued store closings. 
 
 The bleak figures are an outlier to chains like Walmart, Target, Best Buy and Macy's, which have been enjoying stronger sales as they benefit from a robust economy and efforts to make the shopping experience more inviting by investing heavily on remodeling and de-cluttering their stores. 
 
 For decades, Sears was king of the American shopping landscape. Sears, Roebuck and Co.'s iconic catalog featured items from bicycles to sewing machines to houses, and could generate excitement throughout a household when it arrived. The company began opening retail locations in 1925 and expanded swiftly in suburban malls from the 1950s to 1970s. But the onset of discounters like Walmart created challenges for Sears that have only grown. Sears faced even more competition from online sellers and appliance retailers like Lowe's and Home Depot. Its stores became an albatross. 
 
 Store shelves have been left bare as many vendors have demanded more stringent payment terms, says Mark Cohen, a professor of retailing at Columbia University and a former Sears executive. 
 
 Meanwhile, Sears workers are nervous about what kind of severance they'll receive if their store closes. 
 
 John Germann, 46, works full-time and makes $14 per hour as the lead worker unloading merchandise from trucks at the Chicago Ridge, Illinois store, which has been drastically reducing its staff since he started nine years ago. Germann now has only 11 people on his team, compared with about 30 a few years ago. 
 
 "We're doing the job of two to three people. It's not safe," he said. "We're lifting treadmills and refrigerators." 
 
 Real estate experts believe that Sears' move to further shutter stores as part of its restructuring would be a mixed blessing for landlords. For the healthy malls, landlords would welcome a Sears departure, allowing them to cut up the space and fill it with several smaller successful stores that combined would bring in higher revenue. 
 
 But for the struggling malls, Cohen says it will be a "death knell" since it will be harder for them to bring in new tenants. Many of these malls already have had difficulty filling in the void from J.C. Penney and Macy's closures. 
 
 Saunders of GlobalData Retail spared no criticism of Sears in his analyst note, listing failing after failing of the company. 
 
 "The problem in Sears case is that it is a poor retailer," he wrote. "Put bluntly, it has failed on every facet of retailing from assortment to service to merchandise to basic shop keeping standards. Under benign conditions, this would be problematic enough but in today's hyper-competitive retail environment it is a recipe for failure on a grand scale."
– Bogged down by some $465 million in debt, Reader's Digest publisher RDA Holdings has filed for bankruptcy—again. Last night's Chapter 11 filing was the publisher's second in 3 ½ years, the Wall Street Journal reports. The company says this second bankruptcy will only make it stronger, allowing it to focus on its North American business and cut its debt to $100 million. "It’s a very good new lease on life," CEO Bob Guth tells Bloomberg. Guth is the company's third CEO since its last bankruptcy, which, of course, was also supposed to give it a new lease on life; the bankruptcy judge at the time declared that the company would emerge "on a very healthy and viable basis." Instead, the pressures facing the print industry have weighed on the company—its most recent earnings showed revenue down 26% on the year.