Reader’s Digest Association, publisher of the pocket-sized Reader’s Digest, ousted president and CEO Tom Williams and replaced him with board member Robert Guth, who acknowledged reports that RDA might sell off underperforming businesses.
Williams himself had only served in the position since April when he was moved up from CFO to replace Mary Berner. Since then, the company reportedly hired investment bankers Evercore Partners and Morgan Stanley to shop it to potential buyers. The company declined to comment on the reports at the time.
Monday’s move follows a string of setbacks for RDA. Berner was brought on in 2007 to turn it around. Then the recession hit, forcing the company to make deep staff cuts. A prepackaged bankruptcy followed. Its new owners, including hedge funds Alden Global Capital and Point Lobos Capital, named a new slate of board members in April. RDA is best known for its 5.6-million circulation flagship, but it represents a minority of its revenue. RDA also puts out other magazines, books, music, and videos.
Guth, 48, was one of those new board members. He has spent most of his career in technology and telecom, including four years as CEO of TelCove, a telecom company.
In an email to staff following his new appointment, he gave a blunt assessment of RDA, acknowledging frustration with the recurring leadership changes and pessimism in the ranks. Guth said the company has an “unbelievably strong core business,” but that it wasn’t “performing to its potential” and that he was put in place to enact “significant changes."
“I’ve asked many people within the company, ‘Is this a great business?’ Unfortunately, I have not heard nearly enough ‘Yes’ answers in response,” he wrote in the email.
But when it comes to parts of the business that don't have market-leading positions, he wrote, the company will "move on and no longer be distracted."