Zinio Undergoes Executive Shuffle, New Strategic Focus
Names new CEO and president, forms board of directors.
Zinio, a digital magazine newsstand and reading platform, has shaken up its leadership team by naming a new CEO and president and forming a board of directors. The appointments come on the heels of a review done by investment bank Montgomery & Co. earlier this year and signal a strategic shift from a product-centric operation to a more customer-focused business plan.
As a result of the changes, co-founder and CEO Rich Maggiotto has been named chief innovation officer. Meanwhile, Rusty Lewis will become CEO and Michelle Bottomley has been named president.
Lewis, who will also be executive chairman, has been an executive in residence at Brown Brothers Harriman, a private equity firm, and before that was an executive at VeriSign. Bottomley was formerly CMO at Barclays' Barclycard division.
In addition to Lewis, five other executives were named to the new board, including owner David Gilmour, Arthur Becker, Bill Grabe, Bill Gray and David Roth.
The company underwent media scrutiny in June when Fortune reported that Zinio put itself up for sale, hiring Montgomery & Co. to oversee the process. Fortune said it was seeking between $50 million and $100 million.
Zinio responded at the time by confirming the retention of Montgomery, but only in a capital-raising effort.
As it turns out, Zinio was weighing whether to sell or seek further investment. The relationship with Montgomery has since ended, but out of that came the appointment of Lewis and Bottomley, as well as the formation of the board and a tightened-up business plan.
"They helped us understand our options and gave us a line of sight of what that meant from a financial standpointâ€”what was possible if we exited at this stage versus continuing to grow," Bottomley tells Folio:.
Following the review, Bottomley says investors "doubled down" with a "significant amount" of further investment capital. "[The review] put the spotlight on the opportunities for us and caused the investors to double down under a very disciplined business plan," she says.
The business plan includes a shift from a product-focused operation, which, says Bottomley, was one of Maggiotto's particular strengths, to a customer-centric strategy. "Rich has done a great job on the product side. The new angle is to put the consumer at the center."
Lewis and Bottomley will be charged with growing Zinio's publisher partnerships as well as enhancing the consumer experience with the product, she says.
Further management changes remain to be seen. While none are on deck at the moment, says Bottomley, that could change. "We are taking a look at the current capabilities in light of the business plan for the next three years. I can't say anything specific, but we are looking at the organization in the context of the new business plan."
Zinio, which says it will distribute 70 million issues this year, has more than 5,000 digital magazines available through its newsstand app.
In August, the company partnered with ShopAdvisor in a plan to embed e-commerce capabilities in ad and edit pages in digital magazines. Also this year, Zinio initiated a refer-a-friend program designed to fast-track issue sales and subs by incentivizing current members with free magazine credits to introduce their friends to the platform.Â