Monthly Archives: April 2013

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Let us not forget that, in addition to all the other things on Martha’s plate, she also serves as Non-Executive Chairman of the Board at MSLO, the company she founded. The management of the company is handled by a management team currently without  a leader, after Lisa Gersh stepped down in December 2012. (A replacement for Gersh has yet to be named.) Yesterday morning, MSLO had a telephone presentation to its investors to review 1Q results for the company.

You can read the entire transcript of the earnings call at Seeking Alpha (which may require free registration), if you’re interested in the behind-the-scenes details of the company’s workings. Some interesting points include:

– Revenue for the quarter totaled $37 million, down 25% from the prior year quarter. Of the total $12.6 million absolute dollar decline in revenue, approximately $9 million can be attributed to the restructuring actions taken in publishing and broadcasting last year.

– Publishing segment revenue declined 21% in the quarter, reflecting lower print advertising and newsstand revenue, offset somewhat by a 12% growth in digital advertising revenue.

– Print revenue declined by $7 million, including $3.2 million on the advertising side and $3.8 million on the circulation side.

– Our digital advertising revenue of $4.8 million was a record first quarter performance for this business and included a significant increase in video related ad revenue.

– Merchandising expenses were significantly higher in this year’s first quarter, due largely to cost related to ramping up for the JC Penney launch.

– There is still uncertainty with respect to revenues to be generated by JC Penney partnership, due to the pending court case. Those royalty revenues were not included in the forecast for 2Q.

So, what we see from the earnings call is further proof of the shift underway at MSLO, as the company seeks to streamline its publication division and also take advantage of new media as a distribution channel for Martha’s sought-after ideas and expertise. Industry-wide, publishing is undergoing much turmoil at this time, but MSLO is well-positioned to become profitable through its merchandising partnerships with major retailers like Macy’s, Home Depot, Michael’s, Staples, and, eventually, JC Penney.

From the meeting transcript, posted on Seeking Alpha:

Before turning the call over to Ken (West, Chief Financial Officer, MSLO), I want to update you quickly on a few items of interest. First, we are excited to report that our rollout with JC Penney is under way. In April, JC Penney’s began rolling out Martha Celebrations, our new line of disposable, stylish paper products for easy entertaining, as well as MarthaWindow, MarthaLighting, MarthaRugs and MarthaMirrors in JC Penney stores and on jcp.com. The rollout will continue through much of the second quarter.

Additionally, we have had some initial discussions with JC Penney’s new CEO, Mike Ullman and other executives. All of us greatly value our partnership and we are looking forward to working with the new team.

In conjunction with the management changes at JC Penney, we reported earlier this month that their two representatives on the MSLO Board have left JC Penney and have resigned from our board as well. JC Penney is actively identifying new designees and we anticipate they will appoint replacement representatives in the near future.

MSLO Discusses 1Q Results with Investors

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Martha Graces the Cover of Parade Magazine

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Martha amazes on the cover of today’s Parade Magazine. Stunning at age 71, Martha also gives an insightful interview that you can read here. (You simply MUST scroll down to see the photo of Martha with her grandkids. Martha is clearly IN LOVE with those kids!) For an extra bit of fun, you can watch this behind-the-scenes video of the cover photo shoot. FOMs: What I love about Martha are those moments when the driven, hardworking girl from Nutley, NJ peeks through all the celebrity that surrounds her. Just. Plain. Awesome.

From the article, Martha says of her new book, “Living the Good Long Life“:

It’s all about surviving in this extraordinary world—physically, mentally, emotionally. I wrote it because nobody is paying attention to the silver tsunami of baby boomers who are now turning 65. My book focuses on what you can do for others and what you can do for yourself in terms of aging gracefully.

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JC Penney Begins Selling Disputed Goods Designed by Martha

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The new house line of home goods at JC Penney, “JCP Everyday”, is now on sale in stores and online! It is well-known that these products were designed by MSLO employees, although they are not allowed to carry the “Martha Stewart” name, pending resolution of the current court case. Some things I noticed as I viewed the items online:

1. They products definitely bear some of Martha’s signature design elements, the hen-egg blue, the faux bois pattern (one of Martha’s favorites), and the overall elevate taste level are definitely Martha-inspired.

2. Most of the products look nothing like similar items for sale at Macy’s as part of the Martha Stewart Collection. True, the pasty bags at one retailer look like the pasty bags at the other–but that’s because of the design requirements inherent in those particular items. 

3. I’m intrigued by the “JCP Everyday” logo (see cookie cutters image above, bottom row at right). The two overlapping houses do, in fact, make an “M”, don’t they? Macy’s brought this up in the court case, as they sought an injunction to halt the sale of these items, even though they do not carry the “Martha Stewart” name on them. The judge denied Macy’s request, and they have appealed. Further, these items are not allowed to be sold in the Martha Stewart stores-within-stores at JC Penney, nor be placed anywhere nearby, pending the outcome of the current court case–a step taken to minimize harm to Macy’s, should they ultimately prevail in court.

FOMs: What do you think? My own message to Macy’s is this: Calm the heck down, would you? It’s clear Martha and her team have no intention of cannibalizing their own profits generated by sales at Macy’s. That wouldn’t be very smart, would it?

From the Reuters article:

“As of today, those products are on the floor and online,” Paul Rutenis, general merchandise manager of J.C. Penney’s home department, said on Monday in testimony in New York State Supreme Court.

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What She Wore: Martha and Her Team at MSLO

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Let’s have some fun, ok?

I love this fun article–with interactive slide show!–that shows what people wear to work at MSLO. It is great, and even gives details in case you want (need) to go shopping. FOMs: Martha looks amazing, doesn’t she? At 72 and still at the top of her game, she is an inspiration.

Enjoy!

From the Wall Street Journal article:

VP, Editor in Chief, Martha Stewart Living, on Martha: “She’s very elegant. She does follow fashion. But she’s also not a slave to trend. She manages that nicely. She always feels on point, but is never trendy for trendy’s sake. She’s got to love the color or the cut. There are certain classic rules that she seems to live by.”

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There was some good news today for Martha in the trial with Macy’s.

First, it may be useful to back up a bit: The case is actually made up of several different claims, including breach of contract, breach of confidentiality, unfair competition, and tortious interference. In some claims, Macy’s has won injunctions, which are essentially temporary smaller rulings in Macy’s favor while the larger issues are resolved permanently in the courtroom. For example, in one injunction, the judge ruled that Martha may NOT sell items in JC Penney stores until the issue of exclusivity has been resolved completely. Macy’s asked the judge to broaden that existing injunction to include items that were designed by MSLO designers but did NOT have Martha’s name on them. These items are instead branded as “jcp Everyday”. Martha insists that these items–$100 million worth of them are already at distribution centers awaiting shipment to JC Penney stores–do NOT violate the exclusivity clause of her contract with Macy’s. Good News: Today, the judge sided with Martha, so these “jcp Everyday” items will begin appearing in JC Penney stores very soon!

However, the judge ruled that the trial would continue on to the next phase. You see, up to this point, Macy’s has been doing all the talking, as they present their case that MSLO violated the exclusivity clause of their contract. Today, the judge took into account all that Macy’s has presented thus far and agreed that may in fact be true. That’s the bad news. The good news is that the trial now shifts to a new phase; one in which MSLO gets to present THEIR side of the story to counter Macy’s claim. Go get ’em, Team Martha!

It is important to note that the judge in this case is still imploring the three parties involved to reach a settlement among themselves, without a judge’s ruling. Contract disputes such as this one are not entirely uncommon, and are often resolved with a financial settlement. In this case, JC Penney and MSLO could buy-out Macy’s contract (or just the exclusivity clause of the contract) although that seems unlikely, given the degree to which Macy’s seems to rely on the Martha Stewart Collection to generate traffic in its stores. By allowing the trial to go forward, and relying on the judge’s ruling, either party risks losing entirely.

Martha vs. Macy’s: Judge Rules JC Penney May Begin Selling Some Items

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MARTHA IS NOW AT JCPENNEY.COM!

Martha at J C Penney

Just launched! Check it out here: Martha at JC Penney

Categories include: Martha Celebrations, Martha Decor, Martha Stewart Crafts, and Martha Stewart Books. Other product offerings are pending outcome of the Martha vs. Macy’s lawsuit. Some resolution on the trial is expected later this month. In the meantime, here is a video of what the MarthaCelebrations store display area will look like: MarthaCelebrations at JC Penney  FOMs: Let’s go shopping!

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