Martha Stewart Living Omnimedia will soon have a new owner, having agreed to Sequential Brands Group's $353 million cash and stock offer. But, as an article by Walter Loeb on Forbes.com points out, the value of Ms. Stewart's brand has slipped considerably over the years.
According to Mr. Loeb, Martha Stewart Living Omnimedia revenues fell from nearly $328 million in 2007 to just under $142 million last year. The company, which generates sales from Martha-branded magazines and consumer brands sold in Macy's and Home Depot, has been unprofitable for all but one year going back to 2003.
Ms. Stewart's empire has taken a hit over the years as the company's publishing wing struggled. Legal woes have also affected Ms. Stewart and her brand. She was imprisoned for a short time following a conviction for insider trading in 2004. More recently, Ms. Stewart came out on the wrong side of legal dispute with Macy's after the company claimed she had violated the terms of their contract in inking a deal with J.C. Penney.
Photo: Martha Stewart
Despite past missteps, CEO Yehuda Shmidman is confident the Martha Brand will grow as part of Sequential Brands.
"Research shows that the Martha Stewart brand has 96 percent awareness among women in the U.S. and seven out of 10 women say that Martha has and does influence the way they think about, organize, and manage their homes," said Mr. Shmidman in a statement. "Looking ahead, we believe that we can leverage our global activation platform at Sequential in partnership with Martha and her team to develop the next chapter of growth for the Martha Stewart brand."
Do not count Mr. Loeb among those as positive about the outlook for Ms. Stewart's brand. While he acknowledges the brand is well known, he contends that Ms. Stewart is out-of-touch with younger consumers. It will be up to Sequential Brands to make the brand relevant again.
Ms. Stewart, who owns 46.2 percent of her company, will become chief creative officer of her brand under Sequential and is widely expected to join its board, as well.
- Sequential Brands Group Signs Definitive Merger Agreement to Acquire Martha Stewart Living Omnimedia - Sequential Brands Group, Inc.
- Martha Stewart Living to sell itself in $353 million deal - Reuters
- Martha Stewart: The Queen of Home Has Lost Her Throne - Forbes
- Martha Stewart Living to Be Bought by Sequential for $353 Million - The Wall Street Journal (sub. required)