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Martha Stewart Living Omnimedia

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Martha Stewart Living Omnimedia
Company typePrivately-held subsidiary of Sequential Brands Group
IndustryPublishing
Internet
Broadcasting
Merchandising
Founded1997
FounderMartha Stewart
HeadquartersStarrett-Lehigh Building
New York City, New York, U.S.
Key people
Martha Stewart
(Chairwoman)
Lisa Gersh
(President and COO)
ProductsMartha
Martha Stewart Living
Everyday Food
Martha Stewart Weddings
Body+Soul
Home decorating products
Home furniture
RevenueDecrease US$ 160.675 million (2013)[1]
Increase US$ -1.897 million (2013)[1]
Increase US$ -1.772 million (2013)[1]
Total assetsDecrease US$ 148.367 million (2013)[1]
Total equityDecrease US$ 70.475 million (2013)[1]
OwnerSequential Brands Group
Number of employees
406 (Feb 2014)[1]
WebsiteMarthaStewart.com

Martha Stewart Living Omnimedia Inc. (MSO) is a diversified media and merchandising company founded by Martha Stewart owned by Sequential Brands Group since December 4, 2015. It is organized into four business segments: Publishing, Internet, Broadcasting media platforms, and Merchandising product lines.[2] MSLO's business holdings include a variety of print publications, television and radio programming, and e-commerce websites.

History

The company was founded, in 1997 by Martha Stewart,[3] as an umbrella for the various media and merchandising ventures linked to the Martha Stewart brand. It went public on the NYSE on October 19, 1999. The stock opened at $18 a share, but shot up to $38 a share, making Stewart an instant billionaire.

She served as president, chairwoman and CEO of the company until being forced to resign as a result of the ImClone insider trading case. As part of an agreement with the SEC, she was banned from serving in any role that would allow her to prepare, audit or disclose financial results of a public company until August 2011.[4] In effect, this banned her from serving as an officer of her own company. However, she still owns a 96 percent controlling interest.

Stewart rejoined the board of directors of her namesake company in September 2011[5] and became its chairwoman once again in May 2012.[6]

On December 4, 2015, it was announced that Sequential Brands Group acquired Martha Stewart Living Omnimedia.[7] As a result of its acquisition, Martha Stewart Living Omnimedia requested that the New York Stock Exchange (NYSE) suspend trading & de-list the company's common stock.[7][8]

Corporate executives

  • Sheraton Kalouria as President of Television
  • Daniel Dienst, Chief Executive Officer and Director (as of 2014)[9]

Publishing

Four newspaper columns — ask Martha, Living, Weddings and Everyday Food — are distributed to newspapers throughout the United States via the New York Times Syndicate. Current books are published through Random House's Clarkson Potter division; earlier titles were offered through subsidiaries of Time Warner prior to Stewart's spin-off of her business ventures from its corporate umbrella. Publishing activities are a major source of income for the company, and accounted for roughly 60% of total revenue in 2005.

Television and radio

Television

On 15 November 2005 Martha Stewart named NBC's Sheraton Kalouria as President of Television[10] for Martha Stewart Living Omnimedia (MSLO), he was responsible for development and production of global programming for cable, broadcast, syndication and DVD as well as managing MSLO's development in the area of digital content for video on demand,[11] web and mobile platforms.

Although MSLO retained no technical ownership stake in NBC's program The Apprentice: Martha Stewart, the company, its magazines, and various business ventures were prominently featured in each episode. Mark Burnett, who produced the series, is also co-producer of the company's daily talk show, Martha.

DVD

MSLO began marketing instructional DVDs in late 2005 through a partnership with Warner Bros., with the first five offerings oriented toward cooking and holiday and special event planning.

Radio

MSLO operates a satellite radio channel, Martha Stewart Living Radio, on Channel 110 of SiriusXM Satellite Radio. Among programs on the channel there was a weekday-evening talk show co-hosted by Martha Stewart's daughter Alexis Stewart, Whatever with Alexis and Jennifer. Alexis left the radio show in June 2011 leaving Jennifer Koppelman-Hutt as the sole host. The show was cancelled in December 2011 and Koppelman-Hutt was terminated.

Internet and direct Commerce

The company's Internet and Direct Commerce segment currently includes its website marthastewart.com and a direct to consumer flower business, marthastewartflowers.com. Through an agreement with Touchpoint, it designed a line of customizable greeting cards under the Marthascards banner, which were sourced and fulfilled by Touchpoint. This agreement was replaced by a new program with Kodak EasyShare Gallery in 2006.

In November 2006, MSLO announced their launch of Martha's Circle which is a lifestyle oriented blog ad-network[12] whose charter members include Apartment Therapy, Smitten Kitchen, and Charles & Hudson.

Historically, the company also produced a print and online catalog, Martha by Mail, which was launched in 1997 and later rebranded as Martha Stewart: The Catalog for Living. Following Stewart's public fallout and the dot-com bubble burst in 2002, the company decided to discontinue both the online and print editions in 2003. The final print catalog was mailed in January 2004, and the online store closed in June of that year.

Merchandising

MSLO additionally offers various home goods through its mass-market Martha Stewart Everyday brand in Kmart stores throughout the United States, and at Sears Canada in Canada. Furniture and paint are part of the company's specialty-retail oriented Martha Stewart Signature brand through a partnership with Bernhardt Furniture Company and previously with Sherwin-Williams. In October 2006, the company announced a new agreement with Lowe's to develop an exclusive interior paints line, which replaced its previous contract with Sherwin-Williams. The new line of paints, Martha Stewart Colors, launched in April 2007.

In April 2006, the company also announced its plans to develop a new, upmarket merchandise line with Macy's, Inc. (at the time named Federated Department Stores) launched in Macy's stores in 2007. The company has also announced its intention to design a new paper-based crafts product line, Martha Stewart Crafts, with EK Success, initially planned for release in time for the Holiday 2006 season, which later debuted in early 2007 at Michael's stores.

In Fall of 2009, Stewart announced the development of a line of outdoor furniture, indoor organization, kitchen cabinets, and decor products at Home Depot.

On December 7, 2011, JCPenney announced the acquisition of 16.6 percent of the company's stock. JCPenney plans to put "mini-Martha Stewart shops" in many of its stores in 2013, as well as starting a web site together.[13]

Wine

On September 14, 2007, Martha Stewart Living Omnimedia announced that it inked a partnership with E & J Gallo Winery to produce a wine brand with the label "Martha Stewart Vintage" for sale in 6 cities, January. The 15,000 cases to be sold include: 2006 Sonoma County Chardonnay, 2005 Sonoma County Cabernet Sauvignon and 2006 Sonoma County Merlot (for Atlanta, Boston; Charlotte, North Carolina; Denver, Phoenix, and Portland, Oregon).

Martha Stewart also signed a contract with Costco Wholesale Corp. to offer a series of food products developed from MSLO’s library of recipes.

Acquisition of Emeril Lagasse Franchise

On February 19, 2008, MSL Omnimedia announced that the company had reached an agreement with celebrity chef Emeril Lagasse to purchase certain business assets for $50 million: $45 million in cash and $5 million in stock.[14] With the exclusion of Emeril Lagasse’s restaurant chain and his foundation, the deal consists of the rights to television programs such as Essence of Emeril and Emeril Live, Emeril Lagasse’s Cookbook library, the emerils.com website, and kitchen and food products.

Controversies

Investor's lawsuit

On August 6, 2002, a class action was filed against Martha Stewart Living Omnimedia, Inc. for misleading investors by issuing materially false and misleading statements, and its officers using insider information to avoid losses. A settlement of $30 million was approved in 2007.[15] In 2004, the company previously recognized as expense its estimate of annualsubscription-acquisition costs ratably throughout the year. After reviewing this matter with its independent certified public accounting firm and its auditcommittee, the company determined on October 26, 2004 to change the method of accounting for interim period expense recognition of its subscription acquisition costs. The company recognized subscription-acquisition costs in the period in which the acquisition efforts took place and restated the financial statements.[16]

Macy's lawsuit

In December 2013, Macy's sued Martha Stewart and Penney after the two companies decided, in 2011, to partner up and open up what would be called Martha Stewart home shops. Macy's sued Martha Stewart for "breach of contract" and sued Penney for "interfering with its agreement with Martha Stewart". Both of these lawsuits were combined in December 2013.[17] Macy's goal was to stop Penney from selling Martha Stewart merchandise that was supposed to be sold exclusively at Macy's.[18]

Macy's settled a portion of its lawsuit with Martha Stewart Omnimedia over a home products deal, however, Macy's continues to sue J.C. Penney Company Inc.[19] Stewart did not disclose the terms of the settlement.[17] This lawsuit cost between "$7 million and $8 million in legal costs", according to CEO Dienst.[9]

References

  1. ^ a b c d e f MARTHA STEWART LIVING OMNIMEDIA, INC., Securities and Exchange Commission, February 26, 2014
  2. ^ "Company Overview". Marthastewart.com. Retrieved 2012-04-28.
  3. ^ Lockwood, Lisa (April 29, 2013). "Martha Stewart Touting American Made". WWD. Retrieved 2 August 2013.
  4. ^ "Securities and Exchange Commission Litigation Release No. 19794 / August 7, 2006". Securities and Exchange Commission. Retrieved 2012-04-28.
  5. ^ "Martha Stewart Rejoins Her Board". New York Times. September 26, 2011.
  6. ^ "Martha Stewart Named Nonexecutive Chairman Of Namesake Company". Wall Street Journal. May 23, 2012.
  7. ^ a b "Martha Stewart Living Omnimedia Announces Closing of Merger with Sequential Brands Group". www.prnewswire.com. PR Newswire. Retrieved 4 December 2015.
  8. ^ "Sequential Brands Group Signs Definitive Merger Agreement to Acquire Martha Stewart Living Omnimedia". Martha Stewart Living Omnimedia. Retrieved 22 June 2015.
  9. ^ a b c d Steigrad, Alexandra (26 February 2014). "MSLO's New CEO Daniel Dienst Hits Reset". WWD. Retrieved 26 February 2014.
  10. ^ Eggerton, John (31 May 2006). "MSLO Taps More Former ABC Execs". Broadcastingcable.com//. Retrieved 17 October 2014.
  11. ^ Thielman, Sam (1 October 2007). "Stewart to launch VOD service". Variety.com/. Retrieved 15 October 2014.
  12. ^ "MSLO Draws Martha's Circle Blog, Lifestyle Site Network". Mediaweek.com. Retrieved 2012-04-28.
  13. ^ "J.C. Penney to offer Martha Stewart shops". Winston-Salem Journal. Associated Press. 2011-12-08. Retrieved 2011-12-08.
  14. ^ Martha Stewart buys Emeril franchise: Associated Press Business News: US:MSO - MSN Money[dead link]
  15. ^ "Class Action Lawsuit Against MSO".
  16. ^ "10-Q/A MARTHA STEWART LIVING OMNIMEDIA INC".
  17. ^ a b Alawadhi, Neha (2 January 2014). "Martha Stewart, Macy's settle lawsuit over Penney deal". Reuters. Retrieved 2 January 2014.
  18. ^ Cho, Janet (23 October 2013). "JCPenney agrees only Macy's can sell some Martha Stewart items". Cleveland. Retrieved 2 January 2014.
  19. ^ Clark, Evan (2 January 2013). "Macy's Settles With Martha Stewart". WWD. Retrieved 2 January 2014.
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