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Trouble In The Orchard: CEO Scholl Exits, Staff Cut

NEW YORK (Hypebot) –
Greg Scholl, President and CEO of indie distribution powerhouse The Orchard is exiting the company amid overall staff reductions of 20%. Scholl is landing on his feet with a new undisclosed position already in place when he leaves the publicly traded company on November 1st.

But 20% or about 20 of the 100 or so Orchard's staffers will not be so lucky. “Reducing staff is always a difficult decision, but in this case, the responsible one, and it better positions The Orchard for future growth and profitability,” Scholl said in a statement. Other cost reductions are planned including taking advantage of technology efficiencies and aligning costs with "a slower-than-expected digital music market growth rate".

As of October 1st, Danny Stein will become interim CEO, supported by an expanded role for current Orchard General Manager Brad Navin. Stein is also CEO of eMusic and both eMusic and The Orchard are controlled by investment firm Dimensional Associates. Board Chairman Michael Donahue will lead a search committee to evaluate candidates and identify a new leader for the company.

Scholl led The Orchard through a tumultuous period that included the transition from an also-ran digital channel for indie musicians to a top tier distributor for many significant indie labels. Along the way, the company merged with a competitor, went public and bought the assets of bankrupt indie label TVT including its physical distribution arm. Scholl positioned The Orchard as a company competing on service rather than price and built an infrastructure to back his claims.

But even as Scholl exits business will continue at The Orchard. “While we are disappointed to lose Greg, The Orchard has one of the best and most experienced teams in the industry and we will continue to offer existing and new clients the high level of service and innovation they have come to expect,” said Danny Stein, an Orchard Director and in-coming Interim CEO. “Over the past two years, The Orchard has completed two major acquisitions and invested in technology efficiencies to make our global team more productive. As a result, and also considering the digital music market grew less quickly than we expected it to grow during 2009, we have eliminated positions and implemented other cost saving measures,” continued Stein.