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| Claude Monet's "Paysage Dans L'Ile Saint Martin," a painting from the Reader's Digest collection of art, is one of 39 pieces to be auctioned at Sotheby's |
Readers Digest to sell off part of art collection
Web posted on: Wednesday, September 16, 1998 3:47:40 PM EDT
NEW YORK (Reuters) -- Readers Digest Association Inc. said Tuesday it 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.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.
Readers Digest Chairman Thomas Ryder plans Wednesday to detail for analysts 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 in a statement. "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."
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| Amedeo Modigliani's "Portrait of Jeanne Hebuterne" |
Charles Moffett, co-chairman of Sotheby's Worldwide Impressionist and Modern Art Department, said the art works together represent one of the most important corporate collections ever assembled.
"It has some of the most wonderful impressionist pictures that have ever appeared in any corporate collection," Moffett told Reuters. "I don't think you will ever see any other corporate collection that has a Monet water lily."
In addition to Monet's "Le Bassin aux Nympheas," other notable works in the collection include a pair of portraits by Modigliani, a Cezanne landscape and a Renoir portrait, "Jeune Femme en Bleu Allant au Conservatoire," Moffett said.
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| Alberto Giacometti's "La Foret: Sept Figures Et Une Tete" |
Museums eying collection
Moffett said the world's museums will be eyeing the collection, and its highlights will be exhibited in Zurich, Paris, Tokyo and Los Angeles before the sale. Although the works represent the bulk of the collection's value, The Readers Digest Collection, which has traveled on two worldwide public tours, will still contain about 8,000 pieces of art, company spokesman Stephen Morelo told Reuters.Morelo said the extensive 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.
"Mrs. Wallace apparently had a marvelous eye, both as an appreciator of art and as a person who could identify which works of art would become prominent and valuable," Morelo said.
He said the auction is not a fire sale. "This is not out of desperation. That is not the case at all." The company's announcement followed a global reorganization announced on July 27 as the first major initiative under Ryder's leadership.
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| Paul Cezanne's "L'Estaque Vu A Travers Les Pinz" |
Sale part of company strategy
The corporate overhaul came amid lackluster profits blamed largely on lagging consumer response to Reader's Digest mail-order products such as books and videos. 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 Wednesday represents the second phase of the reorganization and will include substantive plans that arose after a review of operations over the past few months, Morelo said.
Wall Street analysts were puzzled by the company's decision to liquidate part of its art holdings. "They don't need the cash," said Rudy Hokanson, a media analyst with CIBC Oppenheimer in New York. "The bottom line is, is Readers going to invest the money where it is going to produce growth?"
The company announced on Aug. 18 that it expected "modest" earnings improvement in the next fiscal year over what it described as unacceptable earnings in the current year.
Reader's Digest reported a fourth-quarter profit of 5 cents a share, compared with a loss of 1 cent a share before charges during the same period a year ago. The results fell short of Wall Street expectations by a penny, as tracked by First Call.
The company's stock closed up 43.75 cents at $18.125 on the New York Stock Exchange.
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