Martha Stewart Living Omnimedia Inc. (MSLO, NYSE: MSO) is a diversified media and merchandising company founded by Martha Stewart. 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.
Martha Stewart Living Omnimedia, Inc. (MSO) is an integrated media and merchandising company providing consumers with lifestyle content. Its Company is organized into four segments: Publishing, Broadcasting, Internet and Merchandising. The media and merchandise segment consists of eight core: cooking and entertaining (recipes, techniques, and indoor and outdoor entertaining), holidays (celebrating special days and special occasions), crafts (how-to projects), home (decorating, collecting and renovating), whole living (healthy living and sustainable practices), Weddings (all aspects of planning, celebrating and commemorating a wedding), organizing (homekeeping, petkeeping, clotheskeeping, restoring and other types of domestic maintenance) and gardening (planting, landscape design and outdoor living).
Publishing
During the year ended December 31, 2009, the Company’s Publishing segment accounted for 53% of its total revenues, consisting of operations related to magazine and book publishing. Its flagship magazine, Martha Stewart Living, is the foundation of its publishing business. The Company publishes Martha Stewart Living on a monthly basis with a rate base of 2.025 million. The magazine appeals to the college-educated woman between the ages of 25 and 54 who owns her principal residence. Martha Stewart Living offers lifestyle ideas and original how-to information in a visual, upscale editorial environment. Martha Stewart Weddings targets the bride and serves as a vehicle for introducing young women to its brands.
Martha Stewart Weddings is distributed through newsstands. In addition to quarterly publications, the Company has issued special publications, including, Martha Stewart’s Destination Weddings and Dream Honeymoons. The Company’s Everyday Food magazine, features recipes created for the supermarket shopper and the everyday cook. Everyday Food targets women ages 25 to 49. Body + Soul magazine generates both advertising and circulation revenue, while the newsletter generates all of its revenue from subscriptions. Body & Soul Group also sells a limited line of merchandise related to natural living, which it records as publishing revenue attributed to Body + Soul.
Broadcasting
The Company’s Broadcasting business segment accounted for 19% of its total revenues in 2009. The segment consists of operations relating to the production of television programming, the domestic and international distribution of its library of programming in repurposed formats, revenue derived from the provision of talent services and the operations of its satellite radio channel. Everyday Food, a half-hour original, airs weekly on PBS stations nationwide. In November 2009, the Company renewed its agreement with Sirius XM Satellite Radio.
Internet
In 2009, revenues from the Internet segment accounted for 7% of its total revenues. The marthastewart.com Website offers recipes, articles and video, integrated across the Martha Stewart brands in the food, entertaining, holidays, home and garden, crafts, weddings, pets and whole living categories. The marthastewartweddings.com guides brides-to-be through the planning and designing of their weddings. The wholeliving.com is designed to help women achieve their goals with a focus on wellness and beauty, healthy recipes, green living, fitness and personal happiness. WeddingWire is a localized wedding platform that combines an online marketplace with planning tools and a social community.
Pingg is an online invitation and event management site. Ziplist provides the Company with the technology to power its Martha’s Everyday Food App for the iPhone and Ipod touch. This application became available in 2010. Ziplist is a customizable, multiplatform digital grocery planning and shopping list service. Ziplist allows its customers to add recipe’s ingredients to their grocery lists with one click and those lists can then be synced and shared online. The Website marthastewartflowers.com is operated under the business model of providing floral products shipped directly from farms to consumers.
Merchandising
MSO’s Merchandising segment contributed 21% of its total revenues in 2009. The segment consists of operations related to the design of merchandise and related packaging, promotional and advertising materials, and the licensing of various trademarks, in connection with retail programs conducted through a number of retailers and manufacturers. Its retail partners source the products through a manufacturer base and are responsible for the promotion of the product. Its manufacturing partners source and/or produce the branded products together with other lines they make or sell. MSO owns all trademarks for each of its branded merchandising programs and retain all intellectual property rights related to the designs of the merchandise, packaging, signage and collateral materials developed for the various programs.
The Martha Stewart Living program at The Home Depot consists a range of home decor, seasonal and outdoor living products, including paint, storage and organization, and outdoor furniture. The Martha Stewart Collection line consists a range of home goods, including bed and bath textiles, housewares, casual dinnerware, flatware and glassware, cookware, holiday decorating and trim-a-tree items. In November 2009, MSO launched a range of fragrance-free home cleaning liquids under the Martha Stewart Clean brand in partnership with The Hain Celestial Group.
The Company competes with Bed Bath & Beyond, BJ’s, JC Penney, Kmart, Kohl’s, Lowe’s, Sam’s Club Target and Wal-Mart.
The following year Stewart acquired majority interest in the company and renamed it Martha Stewart Living Omnimedia, L.L.C. With the continued help of Sharon Patrick, Stewart had arranged the purchase of at least 80 percent of the company for about $75 million, although figures vary according to different accounts. Time's remaining stake in the company was generally estimated to be between five and ten percent, with the balance of the stock held by Patrick and staff members. The separation from Time was reportedly a friendly one. Don Logan, chair and CEO of Time Inc., agreed to join the new board for Martha Stewart Living Omnimedia. Stewart initially appointed Patrick president and chief executive officer, but soon took the helm as CEO, while Patrick remained president and COO. The buyout was financed in large part with new contracts from Kmart and Sherwin-Williams. The contracts called for big up-front payments and royalties. "We did it on cash flow," Patrick told the New York Times, adding "We didn't mortgage the company."
The Kmart deal added to concern among market analysts that Stewart was clouding her image with too many endorsements and target markets that were too varied. One expert in branding and positioning, Clay Timon, speculated to Advertising Age that Stewart was in danger of spreading herself across too many categories and images. "You don't want people asking, 'Who is Martha Stewart? Is [her image] rural, country, city? Williams Sonoma or Kmart?," he explained. Stewart defended her move to expand her presence at the discount retailer, remarking in the New York Times: "Why not take good messages to less fortunate people?" The new Kmart deal was different than the first in that Martha Stewart Living Omnimedia retained control over the entire production process, from design to advertising, of a newly named Martha Stewart Everyday product line. "Whether it's a hang tag on a dish towel or a label on a paint can, everything has to look as good as the magazine," production director Dora Braschi Cardinale explained to the New York Times. With such control, the company hoped to maintain a consistent brand image.
The contract with Sherwin-Williams was signed in May 1997 and spelled out an agreement for Stewart to help design a Martha Stewart line of paints. Originally carried exclusively by Kmart, the paint line was offered by Sears beginning in March 1998.
Continued Rapid Expansion in the Late 1990s
Now free to pursue her vision for the company, Stewart led a rapid and varied expansion of Martha Stewart Living Omnimedia in 1997 and early 1998. The "Martha Stewart Living" television show moved from a weekly to a weekday schedule. The show was distributed by CBS's Eyemark Entertainment, and Stewart soon left her biweekly appearance schedule on NBC's "Today" show to begin appearing weekly on the "CBS This Morning" program. In September 1997 the company launched a daily 90-second radio feature known as "askMartha," which was produced in conjunction with a syndicated newspaper column of the same name. In October, the "Martha by Mail" insert in the Martha Stewart Living magazine was expanded into a direct mail catalogue. Also in 1997, the company introduced a web site that provided guides for the television show and magazine and published recipes and instructions for the projects presented on the show. The web site also highlighted items from the company's "Martha by Mail" catalogue and allowed users to order over the Internet.
Stewart also had plans for the lucrative Kmart partnership. Total Kmart sales from the Martha Stewart Everyday line were up to $500 million a year in 1997, and Stewart hoped to build on that popularity by introducing new lines of cooking, gardening, and decorating merchandise. According to Steve Riman, a Kmart vice-president, these new products were expected to raise the percentage of Kmart revenues from Martha Stewart products even higher&mdashø 70 percent by the year 2000.
In December 1997 the company completed construction on a new studio in Westport, Connecticut. The $4 million facility was designed for taping Stewart's television and radio shows and included large kitchens for that purpose and state-of-the-art equipment.
Early in 1998, the company's new and established ventures were going strong. The "askMartha" newspaper column was syndicated in 212 papers, and the radio feature was being broadcast on 135 stations. The "Martha Stewart Living" television program was getting top ratings and was offered on 197 stations across the nation. The 1997 circulation of Martha Stewart Living magazine was numbered at 2.3 million, 30 percent higher than in 1996. Kmart bed and bath merchandise sales for 1997 were estimated at $500 to $700 million and sales of Martha Stewart Everyday paint was estimated at $16 million. According to company executives, profits had doubled from 1996 to 1997.
Soon after taking over ownership of the company, Martha Stewart began talking about taking the company public. "I'd be very keen to do a public offering at some point ... probably within the next three to five years," Stewart told Advertising Age in February 1997. Consideration of that possibility continued into early 1998. Debate over the company's ability to stand on its own ensued. "You have to ask yourself, if Martha Stewart got hit by a cab tomorrow, to what extent is there a viable company there?," Linda R. Killian, an analyst and portfolio manager with the Renaissance Capital Corporation, explained to the New York Times. She continued, "Martha Stewart has created brand equity. I think it's completely plausible that she has a viable public company. She's been around for a long time, and she has gone beyond being a one-product company." Others, however, questioned whether profits would be hurt by rapid expansion or whether the company could actually go on without Stewart. As for Stewart, she expressed confidence in the independence of her company to the New York Times: "It won't die with me. I think we are now spread very nicely over an area where our information can be trusted."
OVERALL
Beta: 1.90
Market Cap (Mil.): $203.83
Shares Outstanding (Mil.): 55.09
Annual Dividend: --
Yield (%): --
FINANCIALS
MSO Industry Sector
P/E (TTM): -- 15.66 18.17
EPS (TTM): -471.51 -- --
ROI: -7.94 4.21 1.56
ROE: -9.31 4.88 2.40
Statistics:
Private Company
Incorporated: 1997
Employees: 230
Sales: $120 million (1997 est.)
SICs: 2721 Periodicals; 2731 Books; 5961 Catalog & Mail-Order Houses; 7812 Motion Picture & Video Tape Production
Name Age Since Current Position
Koppelman, Charles 71 2008 Executive Chairman of the Board, Principal Executive Officer
Marino, Robin 56 2009 President and Chief Executive Officer - Merchandising
Jacques, Allison 46 2011 Interim Principal Financial and Accounting Officer, Controller
Hurwitz, Peter 51 2009 Executive Vice President, General Counsel
Stewart, Martha 69 2010 Chief Editorial, Media and Content Officer
Beers, Charlotte 75 2008 Independent Director
Slotkin, Todd 58 2008 Independent Director
Roskin, William 68 2008 Independent Director
Kantarian, Arlen 58 2009 Independent Director
Fekkai, Frederic 52 2009 Independent Director
Slacik, Claudia 54 2011 Independent Director
Address:
20 West 43rd Street
25th Floor
New York, New York 10036-7400
U.S.A.
Martha Stewart Living Omnimedia, Inc. (MSO) is an integrated media and merchandising company providing consumers with lifestyle content. Its Company is organized into four segments: Publishing, Broadcasting, Internet and Merchandising. The media and merchandise segment consists of eight core: cooking and entertaining (recipes, techniques, and indoor and outdoor entertaining), holidays (celebrating special days and special occasions), crafts (how-to projects), home (decorating, collecting and renovating), whole living (healthy living and sustainable practices), Weddings (all aspects of planning, celebrating and commemorating a wedding), organizing (homekeeping, petkeeping, clotheskeeping, restoring and other types of domestic maintenance) and gardening (planting, landscape design and outdoor living).
Publishing
During the year ended December 31, 2009, the Company’s Publishing segment accounted for 53% of its total revenues, consisting of operations related to magazine and book publishing. Its flagship magazine, Martha Stewart Living, is the foundation of its publishing business. The Company publishes Martha Stewart Living on a monthly basis with a rate base of 2.025 million. The magazine appeals to the college-educated woman between the ages of 25 and 54 who owns her principal residence. Martha Stewart Living offers lifestyle ideas and original how-to information in a visual, upscale editorial environment. Martha Stewart Weddings targets the bride and serves as a vehicle for introducing young women to its brands.
Martha Stewart Weddings is distributed through newsstands. In addition to quarterly publications, the Company has issued special publications, including, Martha Stewart’s Destination Weddings and Dream Honeymoons. The Company’s Everyday Food magazine, features recipes created for the supermarket shopper and the everyday cook. Everyday Food targets women ages 25 to 49. Body + Soul magazine generates both advertising and circulation revenue, while the newsletter generates all of its revenue from subscriptions. Body & Soul Group also sells a limited line of merchandise related to natural living, which it records as publishing revenue attributed to Body + Soul.
Broadcasting
The Company’s Broadcasting business segment accounted for 19% of its total revenues in 2009. The segment consists of operations relating to the production of television programming, the domestic and international distribution of its library of programming in repurposed formats, revenue derived from the provision of talent services and the operations of its satellite radio channel. Everyday Food, a half-hour original, airs weekly on PBS stations nationwide. In November 2009, the Company renewed its agreement with Sirius XM Satellite Radio.
Internet
In 2009, revenues from the Internet segment accounted for 7% of its total revenues. The marthastewart.com Website offers recipes, articles and video, integrated across the Martha Stewart brands in the food, entertaining, holidays, home and garden, crafts, weddings, pets and whole living categories. The marthastewartweddings.com guides brides-to-be through the planning and designing of their weddings. The wholeliving.com is designed to help women achieve their goals with a focus on wellness and beauty, healthy recipes, green living, fitness and personal happiness. WeddingWire is a localized wedding platform that combines an online marketplace with planning tools and a social community.
Pingg is an online invitation and event management site. Ziplist provides the Company with the technology to power its Martha’s Everyday Food App for the iPhone and Ipod touch. This application became available in 2010. Ziplist is a customizable, multiplatform digital grocery planning and shopping list service. Ziplist allows its customers to add recipe’s ingredients to their grocery lists with one click and those lists can then be synced and shared online. The Website marthastewartflowers.com is operated under the business model of providing floral products shipped directly from farms to consumers.
Merchandising
MSO’s Merchandising segment contributed 21% of its total revenues in 2009. The segment consists of operations related to the design of merchandise and related packaging, promotional and advertising materials, and the licensing of various trademarks, in connection with retail programs conducted through a number of retailers and manufacturers. Its retail partners source the products through a manufacturer base and are responsible for the promotion of the product. Its manufacturing partners source and/or produce the branded products together with other lines they make or sell. MSO owns all trademarks for each of its branded merchandising programs and retain all intellectual property rights related to the designs of the merchandise, packaging, signage and collateral materials developed for the various programs.
The Martha Stewart Living program at The Home Depot consists a range of home decor, seasonal and outdoor living products, including paint, storage and organization, and outdoor furniture. The Martha Stewart Collection line consists a range of home goods, including bed and bath textiles, housewares, casual dinnerware, flatware and glassware, cookware, holiday decorating and trim-a-tree items. In November 2009, MSO launched a range of fragrance-free home cleaning liquids under the Martha Stewart Clean brand in partnership with The Hain Celestial Group.
The Company competes with Bed Bath & Beyond, BJ’s, JC Penney, Kmart, Kohl’s, Lowe’s, Sam’s Club Target and Wal-Mart.
The following year Stewart acquired majority interest in the company and renamed it Martha Stewart Living Omnimedia, L.L.C. With the continued help of Sharon Patrick, Stewart had arranged the purchase of at least 80 percent of the company for about $75 million, although figures vary according to different accounts. Time's remaining stake in the company was generally estimated to be between five and ten percent, with the balance of the stock held by Patrick and staff members. The separation from Time was reportedly a friendly one. Don Logan, chair and CEO of Time Inc., agreed to join the new board for Martha Stewart Living Omnimedia. Stewart initially appointed Patrick president and chief executive officer, but soon took the helm as CEO, while Patrick remained president and COO. The buyout was financed in large part with new contracts from Kmart and Sherwin-Williams. The contracts called for big up-front payments and royalties. "We did it on cash flow," Patrick told the New York Times, adding "We didn't mortgage the company."
The Kmart deal added to concern among market analysts that Stewart was clouding her image with too many endorsements and target markets that were too varied. One expert in branding and positioning, Clay Timon, speculated to Advertising Age that Stewart was in danger of spreading herself across too many categories and images. "You don't want people asking, 'Who is Martha Stewart? Is [her image] rural, country, city? Williams Sonoma or Kmart?," he explained. Stewart defended her move to expand her presence at the discount retailer, remarking in the New York Times: "Why not take good messages to less fortunate people?" The new Kmart deal was different than the first in that Martha Stewart Living Omnimedia retained control over the entire production process, from design to advertising, of a newly named Martha Stewart Everyday product line. "Whether it's a hang tag on a dish towel or a label on a paint can, everything has to look as good as the magazine," production director Dora Braschi Cardinale explained to the New York Times. With such control, the company hoped to maintain a consistent brand image.
The contract with Sherwin-Williams was signed in May 1997 and spelled out an agreement for Stewart to help design a Martha Stewart line of paints. Originally carried exclusively by Kmart, the paint line was offered by Sears beginning in March 1998.
Continued Rapid Expansion in the Late 1990s
Now free to pursue her vision for the company, Stewart led a rapid and varied expansion of Martha Stewart Living Omnimedia in 1997 and early 1998. The "Martha Stewart Living" television show moved from a weekly to a weekday schedule. The show was distributed by CBS's Eyemark Entertainment, and Stewart soon left her biweekly appearance schedule on NBC's "Today" show to begin appearing weekly on the "CBS This Morning" program. In September 1997 the company launched a daily 90-second radio feature known as "askMartha," which was produced in conjunction with a syndicated newspaper column of the same name. In October, the "Martha by Mail" insert in the Martha Stewart Living magazine was expanded into a direct mail catalogue. Also in 1997, the company introduced a web site that provided guides for the television show and magazine and published recipes and instructions for the projects presented on the show. The web site also highlighted items from the company's "Martha by Mail" catalogue and allowed users to order over the Internet.
Stewart also had plans for the lucrative Kmart partnership. Total Kmart sales from the Martha Stewart Everyday line were up to $500 million a year in 1997, and Stewart hoped to build on that popularity by introducing new lines of cooking, gardening, and decorating merchandise. According to Steve Riman, a Kmart vice-president, these new products were expected to raise the percentage of Kmart revenues from Martha Stewart products even higher&mdashø 70 percent by the year 2000.
In December 1997 the company completed construction on a new studio in Westport, Connecticut. The $4 million facility was designed for taping Stewart's television and radio shows and included large kitchens for that purpose and state-of-the-art equipment.
Early in 1998, the company's new and established ventures were going strong. The "askMartha" newspaper column was syndicated in 212 papers, and the radio feature was being broadcast on 135 stations. The "Martha Stewart Living" television program was getting top ratings and was offered on 197 stations across the nation. The 1997 circulation of Martha Stewart Living magazine was numbered at 2.3 million, 30 percent higher than in 1996. Kmart bed and bath merchandise sales for 1997 were estimated at $500 to $700 million and sales of Martha Stewart Everyday paint was estimated at $16 million. According to company executives, profits had doubled from 1996 to 1997.
Soon after taking over ownership of the company, Martha Stewart began talking about taking the company public. "I'd be very keen to do a public offering at some point ... probably within the next three to five years," Stewart told Advertising Age in February 1997. Consideration of that possibility continued into early 1998. Debate over the company's ability to stand on its own ensued. "You have to ask yourself, if Martha Stewart got hit by a cab tomorrow, to what extent is there a viable company there?," Linda R. Killian, an analyst and portfolio manager with the Renaissance Capital Corporation, explained to the New York Times. She continued, "Martha Stewart has created brand equity. I think it's completely plausible that she has a viable public company. She's been around for a long time, and she has gone beyond being a one-product company." Others, however, questioned whether profits would be hurt by rapid expansion or whether the company could actually go on without Stewart. As for Stewart, she expressed confidence in the independence of her company to the New York Times: "It won't die with me. I think we are now spread very nicely over an area where our information can be trusted."
OVERALL
Beta: 1.90
Market Cap (Mil.): $203.83
Shares Outstanding (Mil.): 55.09
Annual Dividend: --
Yield (%): --
FINANCIALS
MSO Industry Sector
P/E (TTM): -- 15.66 18.17
EPS (TTM): -471.51 -- --
ROI: -7.94 4.21 1.56
ROE: -9.31 4.88 2.40
Statistics:
Private Company
Incorporated: 1997
Employees: 230
Sales: $120 million (1997 est.)
SICs: 2721 Periodicals; 2731 Books; 5961 Catalog & Mail-Order Houses; 7812 Motion Picture & Video Tape Production
Name Age Since Current Position
Koppelman, Charles 71 2008 Executive Chairman of the Board, Principal Executive Officer
Marino, Robin 56 2009 President and Chief Executive Officer - Merchandising
Jacques, Allison 46 2011 Interim Principal Financial and Accounting Officer, Controller
Hurwitz, Peter 51 2009 Executive Vice President, General Counsel
Stewart, Martha 69 2010 Chief Editorial, Media and Content Officer
Beers, Charlotte 75 2008 Independent Director
Slotkin, Todd 58 2008 Independent Director
Roskin, William 68 2008 Independent Director
Kantarian, Arlen 58 2009 Independent Director
Fekkai, Frederic 52 2009 Independent Director
Slacik, Claudia 54 2011 Independent Director
Address:
20 West 43rd Street
25th Floor
New York, New York 10036-7400
U.S.A.