Time Life, which sells books, music and videos direct, reported a loss for the first nine months of 2003 of over $50m (£27.4m), which included some restructuring charges, pulling down Time Warner's overall results.
The decision to sell off the brand founded in 1961 comes as Time Inc, the US's largest publisher of magazines, looks to focus on its core magazine publishing business. Time Inc is reported to have been trying to free up capital for new magazines, believed to include a planned women's weekly title.
As well as owning the eponymous Time magazine, the firm also owns IPC Media in the UK.
Terms were not disclosed in an official statement, but Direct Holdings has acquired an exclusive long-term licence for the worldwide use of the Time Life brand.
Direct Holdings was formed last year by private equity firms Zelnick Media and Ripplewood Holdings.
The two funded the deal partly in cash and partly through potential future royalty payments. Zelnick Media will be responsible for the day-to-day management of the company, with Strauss Zelnick as chairman and CEO.
Time Life has annual revenues of around $350m. The company says it wants to cut costs and stimulate revenue growth by merging back-office operations of its two units.
Despite its decline, Time Life still carries a lot of cachet. The two private-equity firms plan to unite Time Life with Lillian Vernon, a direct marketer of household, children's and gift merchandise, which they acquired in July 2003.
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