Rocky Road for Rodale Inc.

Gunning for New E-Commerce Amid Executive Departures

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In her three years as chief executive of Rodale Inc., Maria Rodale has not hesitated to put her stamp on the health and wellness publisher founded in 1930 by her grandfather. New initiatives include a "reinvention" of old stalwart Prevention magazine that will make its debut in January, and the launch of an organic-lifestyle e-commerce site coming in the spring.

Maria Rodale
Maria Rodale

The chairman and CEO has also been known to speak her mind in meetings in ways that have flabbergasted seasoned executives, but which she attributes to a belief in being open and transparent.

But most conspicuous about Ms. Rodale's tenure has been the dizzying series of departures of top executives, culminating two weeks ago with longtime Men's Health Editor-in-Chief David Zinczenko. A polarizing figure regarded by many former colleagues as either a ruthless self-promoter or a brilliant marketer, or both, Mr. Zinczenko is nonetheless credited with turning the title into a $160 million business and the company's biggest source of profits in his dozen years on the job.

The question will be whether Ms. Rodale's unorthodox management style and unpredictable personnel decisions will come back to haunt her, or if she'll make good on her goal of creating an innovative company with an e-commerce revenue stream that supplants losses in print advertising.

Mr. Zinczenko, who declined to comment, had no plans to leave and was surprised by the CEO's move, according to an insider. But he's in good company. Along with Rodale Books Publisher Stephen Perrine, who got axed at the same time, some two dozen senior executives have either jumped or been pushed from Rodale over the past two years -- a remarkable toll for a publisher with just seven magazines and a books division.

Mr. Zinczenko, who had multiple jobs that gave him oversight of much of the company, was an expensive property, earning $1 million in salary and 20% royalties on books he co-authored, like diet blockbuster "Eat This, Not That!," according to a former executive. And Rodale, like all publishers, needs to save money. Though the company remains profitable, annual revenue has plunged to $400 million from the $750 million it was pulling in at its peak around 2006.

In an interview in her midtown office, Ms. Rodale insisted that the turnover has been only partly about costs. Though she inherited "an extremely top-heavy company" from the prior chief executive, Steven Murphy, she has been mainly concerned with creating "a new future" with people who are in "alignment" with her vision, she said.

Characterizing the decision to part ways with Mr. Zinczenko as a mutual one that would help him "grow," Ms. Rodale insisted Men's Health would be in good hands with its new editor-in-chief, former MensHealth.com Editor Bill Phillips. A figure with zero public profile compared with his predecessor, he has been based at the company's headquarters in Emmaus, Pa., where Ms. Rodale spends much of her time. Based in New York, and a figure in its nightlife, Mr. Zinczenko was no fan of the drive to Emmaus.

"The truth is Dave has been a very busy man doing a lot of different things, and I don't think [Mr. Phillips and his team] are going to miss a beat," Ms. Rodale said.

"They're not going to do it the same way that Dave did," she added, referring to Mr. Phillips' digital perspective.

Her move has been met with a mixed reception, partly because of how key Men's Health is to Rodale's business. Spin-off Women's Health is essentially break-even, while Prevention has lost money for years, according to a former executive. Runner's World, the second-most-successful title, also makes money, though on a smaller scale.

Some observers feel that Ms. Rodale may be underestimating the importance of having a public ambassador, particularly one who appears regularly on "Today." "Replacing that kind of visibility is not easy," said a media consultant. "Star editors make publications."

But Ms. Rodale is undeterred and believes that the media business is changing so fast that none of the old rules apply. And she's not alone in thinking Men's Health could benefit from a change.

"We need the next-generation editor to understand how consumers have evolved," said Robin Steinberg, director of publishing investment at media-buying agency MediaVest.

Ms. Rodale is particularly excited about moving into e-commerce with a site called Rodales.com, which she believes will further the company's healthy-living mission. The online store will carry upscale, sustainable goods, including clothing, cosmetics and housewares.

Unlike other publishers that have gotten into e-commerce, the company won't partner with an e-tailer but will run the business itself.

Several former executives said the venture was deeply unpopular in-house because it seemed an expensive diversion from Rodale's core competencies and would pit the publisher against deep-pocketed competitors, most notably Amazon, which recently launched eco-friendly Vine.com. Ms. Rodale, not surprisingly, disagrees.

She points out that the company has a huge database of shoppers from its years as a direct marketer selling books and videos, and has learned from an earlier, failed attempt at e-commerce through defunct magazine Organic Style. Digital chief Anthony Astarita, who helped Barnes & Noble develop the Nook, will lead the effort.

Most important, she sees no alternative in an increasingly difficult media landscape. "You can't build a business just on advertising," Ms. Rodale said. "When I looked at where people are spending money, shopping was at the top of the list. This is where our growth is going to come from."

As for Mr. Zinczenko, his surprise dismissal wasn't all bad, according to an insider. Left stranded in Emmaus with his phone shut off -- he had taken a car service to Pennsylvania to prepare for meetings and wouldn't be picked up until the evening -- he caught a ride with Mr. Perrine. By the time the two unemployed editors got home to New York, they had cooked up plans for a media venture of their own.

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Matthew Flamm is a reporter for Crain's New York Business.

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