Reader's Digest Names New CEO
The day after Ryder was named, the company announced a drop in third-quarter earnings, to 13 cents a share compared with 35 cents a share for the same period last year. The company cited the recent strong dollar as responsible for more than half of the decline.
"We are still living with the effects of promotion and product programs that were put in place 12 to 18 months ago," Grune said.
Investors apparently welcomed Ryder's appointment, which was announced after markets closed April 28. Reader's Digest stock went up $2 to $27.75 a share April 29 on the New York Stock Exchange. It later dipped but still finished the day up slightly at $26.06.
Ryder was president of American Express' Travel-Related Services International unit and has expertise in two key areas for Reader's Digest: direct marketing and publishing. Before joining American Express in 1984 to head its publishing operations -- which include Travel and Leisure, Food and Wine, Your Company and Skyguide -- his 18-year career in publishing included stints at Time Inc. and CBS Magazines.
Reader's Digest, Pleasantville, NY, was on an executive search since CEO James P. Schadt resigned in August. Grune, who served as CEO from 1984 to 1994, came out of retirement to act as interim CEO while a replacement was found. Grune will continue to serve as director.
With a core audience of older readers on the decline, Ryder has a challenge ahead of him. Under Grune's interim leadership, the company has made a series of moves aimed at finding new sources of revenue.
With its May issue, the magazine came out with a new look, modernizing its cover, shrinking its table of contents and re-designing inside pages. In November, the company announced that it was starting an alternative media program combining targeted magazine inserts and co-op mailings. In August, Direct Media Inc., Greenwich, CT, brought Reader's Digest's subscription file to the list-rental market for the first time.