Tag Archives: lisa gersh

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

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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.

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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 vs. Macy’s: Judge Orders Mediation, NY Times Article on Why the Case Matters

Martha in Court

Yesterday, the New York Times had an article on the subject underlying the current court case between Macy’s and MSLO: that it is essentially “a schoolyard fight between two boys — the chief executives of Macy’s and J. C. Penney — over the most popular girl on the playground.”

If you have been following MSLO lately, you would not be blamed for worrying about the current state of the company–the stock price has plummeted and stabilized at the low end, the company is heavily vested in traditional media (which is undergoing much tumult industry-wide) and has suffered layoffs, it has all but lost its television presence, and there is unsettled leadership (former CEO Lisa Gersh stepped down after only five months at the helm). The one fiscal bright spot at the company of late has been its merchandising. Simply, Martha is still seen in the eyes of the public as an arbiter of good taste and high quality, and most importantly, consumers trust her. If Martha says it’s a good thing–you can be sure it’s a good thing.

It is Martha’s reputation for producing good products that the two retail giants–Macy’s and JC Penney’s–are hoping to leverage in their stores. Indeed, embattled JC Penney’s CEO Ron Johnson’s job may depend on his Martha Stewart-anchored plan to resuscitate that company’s housewares department. And, as the Associated Press reported:

“[Macy’s CEO Terry] Lundgren said Macy’s has spent 40 percent of its overall marketing on the Martha Stewart brand and other labels in the home area, even though the home category represents 17 percent of total sales. That’s because even though the home area is typically slow turning, it drives shoppers to the store. “I need the Martha Stewart business to be exclusive,” Lundgren said. “I don’t have a substitute.”

The judge ordered the three companies into mediation on Friday, in an attempt to have them resolve the issues themselves without a court-ordered judgement. So, even as the courtroom drama continues, one thing is for certain: the Martha Stewart brand is still as strong as ever in the eyes of consumers. And that is most definitely a good thing for MSLO.

Check out this very flattering quote from the New York Times article :

It is easy to forget that Ms. Stewart altered the way that people live by decoupling class and taste. Part of the reason that she seems embattled — her media empire is shrinking fast — is that she won her corner of the culture war. When you go into Target or Walmart and see a sage green towel that is soft to the touch, it may not carry her brand, but it reflects her hand. Her tasteful touch — in colors, in cooking, in bedding — is now ubiquitous; she just doesn’t get to cash all the checks anymore.

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MSLO CEO Lisa Gersh is Stepping Down (Already)

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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.

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Martha vs. Macy’s: MSLO Earnings Call Transcript

On July 30, there was a telephone discussion of MSLO’s second-quarter earnings. On the call from MSLO were Lisa Gersh (President and CEO, shown above), Kenneth West (Chief Financial Officer), and Katherine Nash (VP Communications and Investor Relations). This was the first quarterly earnings report since the preliminary injunction issued by the judge in the ongoing Martha vs. Macy’s dispute.

Two things to note from this call, relating to Martha vs. Macy’s:

1. The ruling has no virtually no impact on the introduction of Martha’s items in J.C. Penney stores in March 2013. hooray! What will likely be impacted, however, is the manner in which the products are branded.

2. The judge’s ruling was a preliminary injunction, and not a final ruling. As Gersh explains, “When a court issues a preliminary injunction, the parties are generally directed to settle an order which would then very specifically detail the terms of the order which has not happened yet. We expect that to happen shortly.” So, it sounds as if there can still be a reconciling of interests, where Martha and Macy’s can both be satisfied.

My own thoughts: I wonder if the Martha By Mail brand, already in existence long before Martha’s agreement with Macy’s, is covered by the Martha-Macy’s contract? It would not be unheard of for Martha to protect her existing intellectual property when entering into new contracts, and the Martha By Mail brand already had a well-established prior use. We already know, from earlier reports, that the online component of the Martha- J.C. Penney partnership will be huge. We also know that the Martha By Mail brand was much-loved by the public. (The catalog effort, however, was plagued by distribution and fulfillment issues. The poor performance of some partners was starting to reflect poorly on the Martha Stewart name, so the catalog was shuttered.) Obviously, J.C. Penney already has a catalog infrastructure in place–including distribution and fulfillment–so it would be relatively easy to relaunch the Martha By Mail effort and tap those resources. Importantly, the agreement with Macy’s (which runs through January 2018) would be honored, as they would continue as the sole retailer offering products with the entire “Martha Stewart” name–as the brand name “Martha By Mail” does not contain Martha’s last name. FOMs: Wouldn’t you love to see the return of Martha By Mail?

You can read the entire transcript of the Q2 earnings presentation, as well as the questions and answers that followed, at Seeking Alpha. Note: registration is free!

From Seeking Alpha:

Lisa Gersh:

“First, MSLO will be launching our products both in-store and online with J.C. Penney in the first quarter of 2013 as planned. Nothing about this ruling changes that. This case is primarily a contract dispute over how certain products are branded and sold, not about the validity of the partnership with J.C. Penney.

Second, the minimum guarantee under the J.C. Penney commercial agreement including the increase we just announced is not directly affected by the ruling. We are planning to be in J.C. Penney stores with a wide array of products for consumers early next year. And we are in ongoing development of categories and products as we typically are with all of our partners.”

via Martha Stewart Living Omnimedia’s CEO Discusses Q2 2012 Results – Earnings Call Transcript – Seeking Alpha.

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