Martha Stewart Living set the agenda for homemaking for decades. A model turned stockbroker (turned caterer, turned author, turned retail consultant, turned talk show host), Stewart was a 20th century authority on simple, do-it-yourself, classy quality.
Her monogrammed dish towels, aprons, lawn furniture and sheets were posh and reliable, and after her company’s 1999 IPO, Stewart’s stamp of approval was worth $2 billion.
Now, one share of Martha Stewart Living Omnimedia isn’t worth the price of a Martha Stewart-branded meat tenderizer or a small Martha Stewart food storage container at Macy’s, or even eight ounces of Martha Stewart garlic hot sauce on eBay.
Sequential Brands Group — in charge of defunct basketball brand And 1 and 2000s-era wheeled children’s shoe Heelys — bought Stewart’s brand June 22 for $353 million in cash, less than a quarter of what the company was once worth.
Analysts say the deal spells the end of the Stewart empire as we know it. Its demise was a long time coming.
“She had it right for a long time. She was the brand. She lived the brand,” said Allen Adamson, chairman of brand consulting firm Landor. “But she can’t just play the old game and expect different results.”
Martha Stewart Living magazine, the herald of the empire, was bamboozled as the publishing industry unraveled in the late 2000s. Her other brands were left behind by technology-driven consumers.
Shoppers who used to flag pages of her magazine for homemaking tips or scribbled notes from her TV program, now surf Pinterest or shop on Etsy and Amazon.com.
And then, of course, Stewart went to prison for charges related to insider trading. A day before drug company ImClone’s stock plummeted in 2001, she sold $230,000 worth of stock in the company. Midway through her appeal process, she decided to serve her five-month sentence. Viacom dropped her television show. She resigned from the board of directors at her namesake brand. She later paid the Securities and Exchange Commission $195,000 to settle related charges.
Now, the brand is being sold for parts, analysts say. Sequential is known for grabbing companies and licensing the brand’s name to lots of products, squeezing out profit like water from a stone.
“Milking them for all they’re worth,” said John Talbott, associate director of the Center for Education and Research in Retailing at Indiana University.
If Stewart’s brand has another life, analysts say, it will most likely be a boring one; not full of monogrammed dish towels or ergonomic spatulas, but perhaps profitable.
“I think he’s got the capability to make lemonade out of lemons,” Talbott said of Sequential chief executive Yehuda Shmidman. Born into a family of rabbis instead of dealmakers, Shmidman entered the business world by selling iPods preloaded with Jewish lectures on the streets of New York City.
Spokesmen for Stewart and for Sequential Brands did not return phone calls or emails seeking comment.
It’s been 16 years since Martha Stewart Living Omnimedia went public. The company’s stock value nearly tripled on its first day of trading in 1999. Stewart opened the New York Stock Exchange by serving fresh squeezed orange juice and brioche to traders as she became a billionaire.
“If you’re taking pots and pans and trying to sell them for more than their intrinsic value, you’re going to need something mythical on the front that makes people go, ‘I’ve gotta buy that,’” Talbott said. “That was Martha Stewart.”
Back then, if hosts or hostesses wanted homemaking advice, they waited for Martha’s magazine. Years later, they tuned in to find her on TV. Now, consumers, especially younger ones, are not doing any of that.
“Consumers don’t typically today look to one person to be the arbitrator of good taste,” Adamson said.
But that’s what Stewart made her name for. She knew — and made — the best ceramic ramekins or salad tongs or flower vases. Who else would or could give you that advice? And who could do it with the weight of a brand that seemingly screamed quality while sipping mint lemonade?
Now that figure looks less and less like a cultural powerbroker, brand analysts say.
Stewart missed out on the e-commerce craze, analysts said, losing a sizable chunk of young and middle-aged customers.
“Younger consumers, millennials do a little more curating,” Adamson said. “They go out and scour the landscape and don’t look to one source.”
Stewart never embraced the digital space those consumers traffic, analysts say. And when Stewart did try to venture online, her company wasn’t aggressive enough to hold on to its market share. Facebook launched in 2004, the year Stewart went to prison, and YouTube went online a month after her release.
“Time context has a tremendous amount to do with the relevance of a brand,” said Wendy Liebmann, chief executive of WSL Strategic Retail. “So I think the convergence of those two, her having to back away and the technology world opening up, did impact her brand.”
Stewart never regained her mantle with a group of home decorators coming of age. And millennials, having grown up in an era saturated by Martha Stewart products, no longer found it unique.
That’s both a knock on and a compliment to Stewart’s impact on the lifestyle industry. There’s an entire generation of consumers who have embraced her credo and brand, only to turn around and search for like products elsewhere.
“Part of her empire was nibbled away by this openness,” Adamson said. “Anyone can be an expert. Write a blog. Go on YouTube.”
In other words, Stewart opened the door to the lifestyle industry, but perhaps a bit too wide for her own good.