Is Martha Stewart still a good thing?
A string of financial troubles has led her company, Martha Stewart Living Omnimedia, to hire investment firm Blackstone Advisory Partners to look for potential backers or partners—maybe even buyers. But money alone won’t be enough to fix her brand.
The story of how Stewart built a multimedia empire around her passion for taste and quality is legendary. But then, of course, she spent time in the big house after her 2004 conviction over a stock sale. The company never fully recovered, and neither has Stewart’s reputation—or her brand. It doesn’t help that she herself has lost some of her cultural relevance as trends have changed, outlets for chic designs have proliferated, and her readers have aged.
The company has lost money in each of the last three years, and its stock price is down 75 percent since 2006. Revenue fell 19 percent last year to $231 million. Yet Stewart herself was paid about $6 million.
The company is quick to point out that it has suffered from the challenges that are plaguing all media companies. But Adam Hanft, CEO of brand strategy firm Hanft Projects, says the troubles go deeper. The company took off at a time when luxury was starting to permeate the mass market. But now, he says, “She’s going against design trends. The look people want today is cleaner and less fussy than what she’s been associated with.”
At the same time, tastemakers have lost the authority with consumers they once had. “We now live in a world of democratized access,” said Paul Woolmington, founding partner of branding agency Naked Communications. “Every conceivable taste is served by blogs.”
Brand experts believe MSLO needs to move beyond its founder while keeping its ties with her esthetic, the way other companies, like Ralph Lauren, have.
Except in the case of a few exceptions like Oprah Winfrey, the notion that an individual can sustain an entire enterprise is a “terrible idea,” says Columbia Business School’s Bruce Greenwald, co-author of The Curse of the Mogul: What’s Wrong With the World’s Leading Media Companies. “Talent is relatively short-lived and replaceable.”
The company, now under new president and COO Lisa Gersh, seems to be trying to move in that direction, hiring former Cookie editor-in-chief Pilar Guzmán to edit flagship magazine Martha Stewart Living and putting a new emphasis on quick-fix recipe apps.