Martha Proclaims “New Chapter” for MSLO

It’s easy to see a shift is underway at MSLO. After declining ad revenues throughout the publishing industry, as advertiser dollars migrate online, MSLO shed the production portions of its publication divisions, while continuing to contribute content development for the popular books and magazines. This is part of the company’s strategy to cut costs at MSLO while expanding its profitable merchandising division, which has been responsible for almost all the company’s profits for several years now.

In this Bloomberg article, Martha is optimistic about her company’s future and her ability to leverage her personal brand to be ambassador of “good things” to homemakers all over the world. Martha has worked hard to earn the public’s trust–so there’s little doubt she’ll succeed.

She also provides very good advice on gift giving for executives, including this one: “What they want is a beautiful piece of jewelry, a handbag — something you’ve thought through. That’s something you don’t mess up.”

Lastly, doesn’t Martha look buoyant and fabulous in the photo? Happy New Year, Martha!

You can read the entire Bloomberg article here.

This is excerpted from the article, as is the photo shown above:

Now I’m more devoted to making things really, really good than making things monetarily successful. If you make them good, the success comes. My company is a case in point. This company has to grow now. It has to. It has every single quality of a really good company and now all I have to do is help make that happen.

JC Penney Scales Back Partnership with Martha

What a difference a CEO makes!

Ron Johnson, former CEO of JC Penney who initiated the partnership with MSLO, was counting on Martha to be the centerpiece of JC Penney’s reimagined housewares department. As the retailer struggled under his leadership, he was replaced by the current CEO, Mike Ullman. Unfortunately, Ullman either doesn’t share Johnson’s faith in the Martha brand, or he thinks that the national retailer should be focused elsewhere–or both. The expensive lawsuit that JC Penney’s has been fighting with Macys in a NYC courtroom is  almost certainly influencing his decision, as well

So, he has decided to scale back significantly JC Penney’s partnership with Martha. Here’s what’s changing:

– JC Penney’s will discontinue selling products in those categories that prompted the lawsuit from Macys.

– JC Penney’s will sell back its share  ($37 million worth!) of MSLO stock purchased as part of the partnership.

– JC Penney’s will no longer have representation on the MSLO Board of Directors

Not great news for Martha and MSLO, where a great portion of revenue is generated by licensing the “Martha Stewart” name. Martha was hopeful that the products offered at JC Penney’s would reach audiences currently unserved by the products sold at Macy’s.

Still, the JC Penney’s partnership will continue, though CEO Ullman seems less devoted to Martha and her products. And the partnership with Macy’s will continue, though Macy’s CEO Terry Lundgren became furious with Martha when she told him of her new relationship with JC Penney’s. Of course, neither CEO would be interested in continuing his partnership with Martha if she and her products were not so popular with the public.

JC Penney Appears Poised to End Partnership with Martha

Things just got more complicated for Martha and Co.

To most following the Martha vs. Macy’s trial, it looks very unlikely that Martha and JC Penney will prevail. In a nutshell: Although Martha’s contract with Macy’s did, in fact, allow for Martha to open stand-alone Martha Stewart stores that offer products in categories–housewares, bedding, bath, and cookware–that would compete with those items offered at Macy’s, the idea that Martha’s “store within a store” actually qualifies as a “stand alone” seems dubious, at best. Ron Johnson, the JC Penney CEO who developed the “store within a store” idea and created the partnership with MSLO, was ousted in April 2013. His predecessor, Mike Ullman, was reappointed to take over the company and has shown little to no enthusiasm for the plan.

Yesterday, reports surfaced that Penney’s was planning to discontinue offering products designed by Martha Stewart in those categories deemed exclusive  in Martha’s contract with Macy’s, effectively throwing in the towel to end the ongoing lawsuit. More worrisome are reports that JC Penney was also ending its entire partnership with Martha, and would not be selling any Martha Stewart products, even in categories that did not impinge upon the Martha-Macy’s contract. According to one insider, CEO Ullman has said, “Her designs aren’t that great. They’re not selling, and they’re nothing that your normal Joe Schmoe can’t come up with.”

Further complicating the matter is the fact that, as part of its partnership with MSLO, JC Penney purchased a 16.6-percent stake in MSLO, infusing the cash-strapped company with $38.5 million. Obviously, MSLO would prefer to see their partnership with JC Penney continue. A MSLO spokesperson has released as statement saying, “J.C. Penney remains one of our many retail partners. Our agreement with them is in force, and we have no intention of ending it.”

If JC Penney does end its partnership with Martha, it is expected that MSLO will sue JC Penney to enforce the contract, unless there is specific language in the contract allowing JC Penney to end it at any time. MSLO had projected its merchandising agreement with JC Penney to generate $200 million dollars in much-needed revenue for the company over the next several years. MSLO has become increasingly dependent upon revenue generated through licensing and merchandising agreements, as sales through its magazine divisions have slowed and Martha’s presence on television has diminished. MSLO stock prices sunk when the news of the end of its JC Penney partnership was leaked.

From the NY Post (as is the above photo):

Ullman, a former Penney CEO who returned to the helm in April to repair damage from a disastrously unsuccessful turnaround effort by Johnson, began to broadcast the split with the beleaguered domestic diva to workers in recent weeks, insiders said.

However, Ullman was determined to give Stewart the boot from the get-go, insiders said.

As reported by The Post, Ullman initially reached out to Macy’s CEO Terry Lundgren to settle the lawsuit, which had already gone to trial with dramatic testimony from Lundgren, Johnson and Stewart herself.

MS Living Editor-in-Chief, Pilar Guzman, is Hired Away by Conde Nast

Word today that Pilar Guzman, the editor-in-chief (EIC) of MSLO’s flagship magazine, “Martha Stewart Living”, has been hired away by Conde Nast, to serve as EIC of that company’s “Conde Nast Traveler” magazine. Guzman was promoted to EIC of “Martha Stewart Living” magazine in early 2011. (You can read the transcript of a conversation between Martha herself and Ms Guzman that appeared on Martha’s blog here.)

Given the changes that have recently taken place at MSLO and specifically, with the magazine–which has essentially shifted its focus away “lifestyle/fine living” to one of “cooking and crafts/instructional”, it is no wonder that we have seen the departures of some key higher-level executives from MSLO. Long-time design visionary, Gael Towey, and CEO Lisa Gersh both departed in late 2012.

It was announced that another long-time Martha Stewart employee, (Creative Director) Eric Pike, would takeover EIC responsibilities at “Martha Stewart Living” magazine. If interested, you can take a tour of Eric’s home here.

From the AdWeek article on Pilar Guzman’s departure (as is the above photograph):

Guzman is also one half of a publishing power couple: Her husband, Chris Mitchell, was the vp, publisher of Traveler until 2011, and now holds the same title at GQ.

In a statement, Guzman praised the magazine’s “engaging features, thoughtful advice and stunning visuals” and added that she looked forward to “drawing upon the insights and vision of the company’s artistic director Anna Wintour to catapult this legendary brand” -–perhaps a signal that Traveler could be the next title to get the Wintour treatment.

What She Wore: Martha and Her Team at MSLO

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.”

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

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.

MSLO CEO Lisa Gersh is Stepping Down (Already)

After only 5 months in the CEO position at MSLO, Lisa Gersh is stepping down. Gersh joined the company in June 2011 as president and COO but was named CEO in July. Before joining Martha Stewart Living, Gersh co-founded Oxygen Media LLC where she was president and COO from 1998 until 2007 when it was acquired by NBC Universal.

Two things:

1. Gersh’s television background doesn’t really fit with MSLO since Martha’s cable TV show was cancelled by Hallmark. Now, Martha’s only regular television presence is on PBS, where she hosts “Martha Stewart’s Cooking School”. Of course, being a commercial-free channel doesn’t exactly make PBS the best place to promote Martha’s own products and those of her sponsors.

2. Word on the street is that there was tension between Gersh, an experienced media executive, and Martha herself. Uh-oh.

Wall Street was not happy with the news of Gersh’s departure: Shares of MSLO fell as much as 9.7% in early trading after the news surfaced.

FOMs: Whew! With all the changes that occurred in 2013, MSLO is positioned to have a stellar 2013. There are lots of new projects on their way: a new vegetarian EDF cookbook in January, resolution of the Macy’s lawsuit in January, the new store-within-a-store at J.C. Penney in March, Martha’s “Living the Good Long Life” book in May. Full speed ahead!

From Bloomberg.com:

Martha Stewart Living Omnimedia Inc. (MSO), the company founded by home-decor guru Martha Stewart, said Chief Executive Officer Lisa Gersh will step down, part of an effort to bolster its merchandising business.

After sluggish advertising sales in its media business contributed to four straight years of losses and declining revenue, Martha Stewart Living is focusing more on selling merchandise through retailers. The company entered an agreement in late 2011 with J.C. Penney Co., a deal that will start boosting revenue by early 2013, according to the statement.

“We are now increasing our capabilities in merchandising and plan to take full advantage of that opportunity for the benefit of our shareholders,” Stewart, who serves as non- executive chairman, said in the statement.

Martha Stewart Extends Employment Agreement For An Additional Five Years

Good news: It looks like Martha’s going to stick around for a little while longer! Today, MSLO announced the extension of Martha’s employment agreement. Her title has officially been changed to Founder and Chief Creative Officer. Lisa Gersh, former Chief Operating Officer has been named Chief Executive Officer. MSLO stock ticked upward on the news that there will still be some “Martha” in Martha Stewart for a few more years. If you want to see some legal gobbledygook on the matter, then click here.

FOMs: Do you think Martha will ever retire from the company? Her passion for learning and sharing what she learns seems to be such an essential part of who she is that it’s difficult to imagine she will ever stop–don’t you agree?

From Marketwatch/PR Newswire:

Martha Stewart Living Omnimedia, Inc. today announced that Martha Stewart has extended her employment agreement with the Company until June 30, 2017. The agreement names Stewart Founder and Chief Creative Officer. Stewart continues to serve as Non-Executive Chairman of the Board.

Lisa Gersh, President and Chief Operating Officer and a member of the Board of Directors since 2011, has been named Chief Executive Officer. Gersh will continue to report to the Board of Directors.

“I am excited by the many phenomenal projects we have underway at Martha Stewart Living Omnimedia,” said Stewart. “I look forward to continuing my work with Lisa, our executive management and creative teams and our strategic partners to continue growing our strong and far reaching brand both domestically and abroad.”

“I look forward to continuing our drive towards sustainable profitability,” said Gersh. “We are focused on elevating the iconic Martha Stewart brand to an even higher level and putting our content and products in reach of even more consumers.”

via Martha Stewart, Founder And Chief Creative Officer, Extends Employment Agreement For An Additional Five Years; Lisa Gersh Named Chief Executive Officer – MarketWatch.