Is Martha Stewart Worth the Fight?

Discussion
Apr 22, 2013

Among the mistakes made by Ron Johnson as CEO at J.C. Penney, one of the biggest may have been his deal to acquire a stake in Martha Stewart Living and sell Martha endorsed (JCP Everyday) and branded home goods within Martha shops in its stores and on its website.

While the lawsuit with Macy’s could be seen as a reason for my labeling the deal a mistake, I think the bigger error may have been in overvaluing what the Martha brand means to the chain’s core base as well as younger customers it set out to attract when Mr. Johnson took over at Penney.

In a channel surfing exercise yesterday, I happened upon Martha Stewart’s Cooking School program on PBS. The resident twenty-something was in the room when I stopped on Martha. "Who is that again?" he asked.

While only a sample of one, the question made me think back to a comment made by Doug Stephens, president of Retail Prophet, in a RetailWire discussion that followed the announcement of the Penney/Martha deal in 2011. He wrote, "If Ron Johnson’s intention is also to invent a time machine that can transport J.C. Penney customers back to the time when Martha Stewart was cool, then I think it might work. Failing that, I’m a little confused."

More recently, Mark Cohen, former CEO of Sears Canada and current professor at Columbia Business School, told Forbes, "Martha is past her sell-by date."

While Penney won a minor victory when a judge refused to grant Macy’s a restraining order preventing the sale of JCP Everyday goods endorsed by Martha, JCP and Martha still have a long way to go to win, in both the judicial and retailing sense. What a kick in the can it would be if Penney and Martha eventually won in the dispute with Macy’s only to lose on the sales floor where it counts most.

Assuming Penney clears its legal hurdles, how important will Martha Stewart be to the chain’s turnaround efforts? What do you see as Penney’s options as they relate to marketing the Martha Stewart brand?

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17 Comments on "Is Martha Stewart Worth the Fight?"


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Bob Phibbs
Guest
9 years 29 days ago

Doug was spot-on. Overexposure has led to a devaluation of her brand, the image and her product lines. Then there’s that felon thing which may have stuck much more than many pundits predicted. Either way, JCP is tied to her come hell or high water.

Gene Hoffman
Guest
Gene Hoffman
9 years 29 days ago

Martha Stewart Living and all the things it might bring with it to Penney’s are entirely too time consuming and over hyped in today’s rapid rush. Any possible turnaround efforts by JCP aren’t dependent upon distribution of Miss Martha’s fine wares.

Penney’s options for marketing the Martha Stewart brand relate to the time left for Martha Stewart products to still mean as much to consumers as they do to the distributing retailers.

Dick Seesel
Guest
9 years 29 days ago
Without knowing exactly how the judge will issue his final ruling in this case, the JCP/Macy’s trial seems to be headed toward a “split decision.” I expect that JCP will be allowed to sell Martha-branded merchandise in non-exclusive categories like window treatments, but will need to sell Martha-designed products in “contract” categories under the JCP label. If I’m correct, this raises multiple questions: 1. Was the risk of infringing on the MSLO/Macy’s agreement worth it? Was the “juice worth the squeeze” in terms of how the Martha brand resonates with the new customer that Ron Johnson was trying to attract? 2. What does the entire chain of events say about Ron Johnson’s judgment? Clearly his recent firing by JCP reflects on a wide range of bad judgment calls, but this may have been the biggest public embarrassment. 3. If JCPenney ends up filling its new home stores with “JCP” product (instead of Martha Stewart), what did it gain? On the last point, JCP has managed to develop product for which it is probably paying a… Read more »
Dr. Stephen Needel
Guest
9 years 29 days ago

While the MS brand may play well with some demographics, hard to believe it resonates with the current or desired JCP shopper.

Bill Emerson
Guest
Bill Emerson
9 years 29 days ago

The question of whether Martha Stewart is or is not part of JCP is nothing more than a distraction. Yes, there will potentially be a customer for some of the merchandise. The real questions are 1) is JCP relevant, 2) do they have any idea how to do that, and 3) do they have enough cash (time) to execute? Beyond that, everything else is a sideshow.

Nikki Baird
Guest
Nikki Baird
9 years 29 days ago

Oh yeah, I forgot about that deal. And the lawsuit—that’s all been quiet lately. As for the turnaround, I’m flummoxed. Are we talking about the original turnaround, or the turnaround of the turnaround? Between the two of them, I no longer have any idea which shoppers JCP is trying to target, or what value proposition they’re offering to those shoppers. So I guess we’ll just have to wait and see.

Rick Moss
Guest
9 years 29 days ago

One aspect that should be considered is the product quality of Martha’s lines. Regardless of the brand recognition, I believe her items stand out for their taste level and consistency of style. Millennials may or may not find those styles attractive. It’s up to Martha’s designers to shift with the times so that they do. If successful in that regard, I believe her brand can endure and, as memories of Martha the personality fade, so will the negative connotations.

Ian Percy
Guest
9 years 29 days ago

Gene’s “over-hyped” comment is a gross understatement. I’m sure I just don’t get this “designer” thing, but honest to goodness, how does a Martha Stewart sheet differ from any other decent quality sheet? My goodness. “Designer Fashion” is today’s snake oil.

Carol Spieckerman
Guest
Carol Spieckerman
9 years 29 days ago

I can’t join the Martha-bashing chorus. Martha Stewart is something that many others aren’t: a lifestyle brand that “works” in multiple categories. The brand is also backed by MSLO’s omni-media presence (what a great name for a company, seriously) and design aesthetic rather than just a shell brand that others bend to their purposes.

The fact that JCP is willing to settle for a designed-by-Martha program speaks volumes to the spectrum of value that the company brings to the table. Does anyone really believe that the battle for Martha is speculative rather than based on hard numbers and results? If Martha isn’t “worth it,” why the fight?

David Zahn
Guest
9 years 29 days ago

I am with Nikki on this. Who is the shopper target? Tell me how the brand connects with that demographic, need state, “job to be done,” etc., and I’ll have a chance at letting you know how important Martha will be to JCP’s future. In terms of options—again; let me know who and then a discussion of how can be had.

Li McClelland
Guest
Li McClelland
9 years 29 days ago

I am in awe of Martha’s staying power and her influence on the style of American home furnishing across categories over the last decade or more. She made regular people (not the Architectural Digest crowd) think about integrated design and color and what they wanted their homes to look like in a way few other marketers and designers ever have. She then provided the product too.

Yes she’s lost some luster and the younger consumers (as always) are looking for something/someone new that will distinguish them from their parents and their older Gen X siblings. But Martha still has many loyalists, too. If JCP is relying on mature consumers who still have a little bit of cash to spend on their abodes, then I think they need Martha in the mix.

Craig Sundstrom
Guest
9 years 29 days ago

I don’t think the qualifier to this question (“If Penney clears its legal hurdles…”) makes much sense, because the legal hurdle IS the problem; or more to the point, it represents the problem: having been in Kmart, and now Macy’s, Martha really isn’t an “exclusive” anymore. But what exactly is she, a brand like Levis, that is so commonplace that you have to carry it (because everyone else does too), or a brand like (insert name here) Motor Oil, that no one really cares about? I guess we’ll just have to keep asking twenty-somethings until we have enough answers to know.

Anne Bieler
Guest
Anne Bieler
9 years 28 days ago

Keeping Martha Stewart on the JCP is still important to keep the core shoppers in the fold; the style and colors still resonate with this group. Younger shoppers are demanding a very different look, so little connection is likely. Difficult call, but losing MS products would likely drive away the more loyal consumers.

Arthur Rosenberg
Guest
Arthur Rosenberg
9 years 28 days ago
My wife watches lots of cooking shows and sees Martha Stewart as somewhere in the middle of a large pack. She feels Martha’s products generally represent a nice, well thought out look and are of decent quality, certainly nothing to pay a premium for. A good friend agrees and considers her value overpriced and never near the best of quality. As to JCP, her surprise as to the magnitude of the case as it is ‘only a contract’, doesn’t serve to win fans. I recently visited two JCP stores to check the mood in the wake of Ron Johnson’s exit. The first had a section of a wall with a photo display of what the coming Martha Stewart section/store will look like. It was marked, ‘Coming Spring 2013’. The display invited shoppers to get a preview of MarthaCelebrations at the JCP website. A JCP store a few miles away already operates MarthaCelebrations as more of a barely noticeable department than a store within a store, with little signage. Most of what is offered is essentially… Read more »
Mark Burr
Guest
9 years 28 days ago
JCP failed to comprehend that their previous marketing process (extensive couponing) had over trained their customers. When it ceased, the doors ceased swinging. Mr. Johnson’s new approach was slow to market and offered no incentive for the customer to swing the doors. JCP is not a “brand” store as much as it is their own company brand store. It never will be a brand store. Neither Martha or any other second tier brand presence by itself will swing the doors again for JCP without incentive. Their options are few if any to marketing the Martha brand. A better approach for them would be marketing what they have done with their stores. In order to do that, they will require incentive to come and incentive to return. Their customer couldn’t likely care less if their towels said Martha or JCP if they are of quality and value. Martha is meaningless to them. They would be best to write off the sunk cost and run. They would be much better off at being an alternative to Target.… Read more »
Christopher P. Ramey
Guest
9 years 28 days ago

Consider Martha Stewart versus Isaac Mizrahi, Philippe Starck, Marc Jacobs, Missoni, etc. JCP should have been channeling Target rather than Macy’s.

William Passodelis
Guest
9 years 28 days ago

The very fact that Mr. Johnson did not even READ the contractual agreement between MSLO and Macy’s says it all. The previous JCPenney customer probably would like Martha products, but wants value and if JCP were able to attract any new, younger customers, they probably would not care about MSLO branding because I do not believe that she resonates strongly with younger generations.

JCP can not be Target or Macy’s—we already have stores to do that—they are called Target and Macy’s. JCP must be smart and find a way to be compelling, in whatever fashion that takes.

Martha, overall, might provide a slight blip up in sales—the stores look pretty good. They need to try and return to some of the former vendors for some of their assortment (better quality). I wish JCP and Mr. Ullman success!

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