Newly named Chairman-CEO Thomas O. Ryder takes over Reader's Digest Association at a time when the company's stock price is declining and its key direct marketing division is lagging.
Named to the post last week after a lenghty search, the former publishing executive succeeds interim Chairman George V. Grune.
Mr. Ryder takes over after several years of declining stock prices at the company, parent of newly redesigned Reader's Digest.
Last week the company's stock hovered at $25.75 a share, substantially lower than the high of 1993, when the stock traded routinely at about $55 a share.
Reader's Digest Association reported net income declined 61% to $14.6 million in the quarter ended March 31 compared to the same period a year earlier. Operating profit declined 58% to $21.7 million, while revenue fell 7% to $635.5 million.
The decline in operating profit was attributed in part to lower customer response rates in the direct mail operations.
Mr. Ryder, 53, has been president of American Express Travel Related Services International since 1995. His prior posts include serving as chairman of American Express Publishing, parent of Travel & Leisure. The executive joins the company this week and was unavailable for comment.
"I look forward with enthusiasm to guiding Reader's Digest in its next phase of its growth and development," Mr. Ryder said in a statement.
Last August, Reader's Digest's board ousted James P. Schadt, and replaced him temporarily with Mr. Grune, his predecessor, who remains on the board.
"Tom Ryder will be a terrific addition," said Gregory Coleman, senior VP-publisher of Reader's Digest. "He really does understand the magazine and the direct-marketing business, which is important."
The direct marketing of books, music and videos accounts for nearly 65% of the company's business.
"We have a major initiative under way to grow the magazine division," Mr. Coleman said. "One thing that we would hope for is that Tom also sees that as an area to expand and has the sense that more magazines are going to be good for the company."
`DIGEST' AD PAGES DOWN
Reader's Digest was down 6.5% in ad pages, to 235.76, for the first quarter, according to Publishers Information Bureau figures.
The company's other titles had mixed results for the quarter. American Health for Women was up 8.1%, to 114.23 ad pages; Family Handyman was down 2.7%, to 111.94; New Choices for Better Living After 50 was down 2.0%, to 92.91; and Walking was down 13.1%, to 45.37 pages.
Daniel B. Brewster Jr., president and CEO of American Express Publishing Corp., believes Mr. Ryder "will shake things up over there. He's not reluctant to change things."
Mr. Brewster was the representative for Time Inc. when Mr. Ryder negotiated the unusual arrangement that allows Time Inc. to manage the American Express titles.
"Tom has a wealth of experience in direct marketing which he brings to Reader's Digest, and he believes in aggressively testing new ideas," Mr. Brewster said.
Since Time Inc. began managing the AmEx titles in 1994, revenues have grown by more than 70%, Mr. Brewster said.
Copyright May 1998, Crain Communications Inc.