German media giant Bertelsmann to sell more book clubs

Business Materials 15 July 2008 23:38 (UTC +04:00)

German media multinational Bertelsmann, which disposed last week of its US book-club businesses, put direct-sale operations in more nations up for sale on Tuesday, dpa reported.

But it said it would keep book-club operations in Italy and several other profitable European markets.

The pullout underlines the major changes afoot at the family-controlled television-broadcast and book-publishing company.

A circular about the move from chief executive Hartmut Ostrowski was seen by Deutsche Presse-Agentur dpa. It was addressed to employees of Direct Group, the company's global book-club division.

It said, "We have decided to initiate the sale process for our businesses in Australia, Britain, New Zealand, the Netherlands and Flanders, Poland, Russia, the Czech Republic, Slovakia and Ukraine."

But Ostrowski said the Bertelsmann would keep its German-, Italian- and French-language operations as well as those in Spain and Portugal.

Direct Group sells books, CD music and DVD movies by mail. The business model, which has suffered with the advent of music and movie recording downloads, requires buyers to commit themselves to regular purchases in exchange for discounts.

On Friday, Bertelsmann, which is based in Guetersloh, Germany, disposed of its US direct-sale operations to private-equity investor Najafi Companies, based in Phoenix, Arizona.

The group has also been backing out of the business of making music recordings as sales in that sector slump.