Bill Williams has been ousted as Harry & David Holdings' chief executive.

Bill Williams has been ousted as Harry & David Holdings' chief executive.

Williams' 21-year ride atop the Rogue Valley's best-known company spanned an ownership transition from a foreign conglomerate to a New York investment firm.

But he was abruptly replaced by Steven J. Heyer on Monday.

Heyer's resume includes some of the world's most prominent consumer brands.

He has served as chief executive officer of Starwood Hotels & Resorts Worldwide and president and chief operating officer of The Coca-Cola Co., Turner Broadcasting System, Young & Rubicam Advertising Worldwide and Booz Allen & Hamilton.

"Steve Heyer is a world-class talent with tremendous strategic vision and unparalleled experience as a brand builder, marketing innovator and operating executive," said Ellis Jones, chief executive officer of Wasserstein & Co., an investment firm whose funds control Harry & David.

Heyer already had a connection with Wasserstein, being named lead director for the investment bank Lazard Ltd. in November after the October death of Lazard Chairman Bruce Wasserstein, who founded Harry & David's current parent company.

Most recently, Heyer co-founded Avra Kehdabra Animation LLC, a computer animation studio focused on full-length feature films, and Next 3D, a software company. He is also active in private equity and venture capital portfolio companies, including a board post for Omnicare Inc, and is a director of the National Collegiate Athletic Association.

Previously he was president and chief operating officer of Turner Broadcasting System Inc. and was a member of AOL Time Warner's Operating Committee from 1994 to 2001. While at Turner, Heyer was instrumental in launching 14 new television networks and led the effort to expand Turner's Internet presence, introducing 19 distinct Web sites for its CNN, Cartoon Network and Turner Classic Movie brands in various languages.

According to a Dow Jones Newswire report, Heyer had a turbulent end to his 21/2-year tenure at Starwood, which concluded in April 2007. He was ousted after an anonymous letter accused him of exchanging inappropriate e-mails with a young female employee. That led to a confrontation with the company's board, and a decision by Heyer to walk away without his $35 million in severance compensation.

He now will take over a Medford-based company that has struggled to maintain revenue levels that peaked four years ago.

Williams oversaw Bear Creek Corp., Harry & David Holdings' predecessor, before being reassigned to other corporate duties when the company was owned by Japan's Yamanouchi Pharmaceutical. He returned as chief executive under Wasserstein six years ago.

"The operational and logistical advances Bill implemented during his tenure as president and CEO have provided the company with a solid foundation that will continue to yield benefits going forward," Jones said in statement.

As the economy declined and the corporations which traditionally were among the Harry & David's top customers suffered, so did orders. That led to multiple rounds of staff layoffs and cuts in pay and benefits. Yet, the company increased its profit in the quarter that ended just after Christmas.

"We can all be thankful that when Harry & David was sold that Bill Williams was retained to keep the company on its course," said Medford Fabrication President Bill Thorndike, who has worked with Williams on statewide boards over the years. "Needless to say, the cards we have all been dealt the last year or two were all difficult hands to play. From my standpoint, Bill should be commended for the drastic cuts and doing the realignment the company needed to make to keep the company competitive.

"It must be unimaginable, the stress he has been under the past year or two as he had to dismantle his team," Thorndike said. "He's been loyal to the company and the owners. Hopefully he will be treated fairly as he exits and looks to new opportunities."

Not everyone saw things the way Williams did or agreed with his decisions.

Consultant Bill Eckart, a member of the Agri-Business Council of Oregon and former Fruit Growers League general manager, said he thinks Williams took Harry & David in the wrong direction over the past half-dozen years.

"He was dismissive to pear growers," Eckart said. "When he came back to Harry & David, the changes I saw weren't that good."

Eckart said the massive infrastructure spending the company embarked on to beef up production of goods it previously purchased put Harry & David in a bad position when the economy weakened.

"They assumed a lot of risk when before the vendors took all the risk," Eckart said. "When the bottom dropped out of the gift trade, they really took some huge losses. The accountants at Wasserstein must have seen something wrong with that."

Those changes cut into the profitability of the company's basic commodity. Harry & David's model of pitching its Royal Riviera comice pears as a value-added gift item allowed the company to earn "about $10,000 on a ton of pears," Eckart said. "That's 10 times the average commodity return for those pears; it was a brilliant strategy."

Expanding production beyond its historic base came at a cost.

"When you bog yourself down with other products that have different levels of overhead — candies, fruitcakes, popcorn and all those things — you're putting more stress on the product that carried the high profit margin."

Williams' No. 2 in command, former chief financial officer Steve O'Connell, left last year after it became clear the Harry & David's initial public offer was dead. O'Connell had worked for Wasserstein before coming West in 2004.

Now, Wasserstein & Co. will have one of its own in the glass house in the northeast corner of the company headquarters along South Pacific Highway.

"When you are owned by someone else, you are always subject to their vision of the future," Thorndike said. "The people who own it have their own best ideas of how the company should stay and prosper."

Reach reporter Greg Stiles at 776-4463 or e-mail