Sale of Stewart brand

Sequential to ac­quire Martha Stewart Liv­ing Om­n­i­me­dia in cash- and- stock deal.

Los Angeles Times - - TECHNOLOGY - By Sa­man­tha Ma­sunaga sa­man­­

Once seen as the queen of do- it- your­self do­mes­tic makeovers, Martha Stewart and her brand were the go- to for easy din­ner recipes, bak­ing sup­plies and home fur­nish­ings.

But Stewart’s com­pany fo­cus on pub­lish­ing, broad­cast­ing and mer­chan­dis­ing was not im­mune to the In­ter­net’s dis­rup­tion of the media in­dus­try.

On Mon­day, her name­sake com­pany, Martha Stewart Liv­ing Om­n­i­me­dia Inc., said it will be ac­quired by Sequential Brands Group Inc. in a cash- and­stock deal val­ued at $ 353 mil­lion.

Un­der the agree­ment, ap­proved by both compa- nies’ boards of di­rec­tors, Stewart will serve as chief cre­ative of­fi­cer.

She will also be­come a “sig­nif­i­cant stock­holder” of the new com­pany and will be nom­i­nated to serve on its board of di­rec­tors.

“This merger is po­si­tioned to fur­ther the growth and ex­pan­sion of the unique Martha home and lifestyle brand,” Stewart said in a state­ment.

The com­pany re­ported net losses ev­ery year since 2003 with the ex­cep­tion of 2007, ac­cord­ing to SEC f il­ings.

The deal was not a sur­prise to some an­a­lysts, like Michael Kupin­ski, man­ag­ing di­rec­tor of media and en­ter­tain­ment for Noble Fi­nan­cial Cap­i­tal Mar­kets.

“What Sequential does is it has the in­ter­na­tional in­fra­struc­ture,” he said. “It will al­low this com­pany to re­ally grow nicely in the in­ter­na­tional mar­kets for the fore­see­able fu­ture.”

Sequential owns And1, Linens ’ n Things and Jes­sica Simp­son.

Stewart founded her com­pany in 1997 af­ter cre­at­ing a mag­a­zine called Martha Stewart Liv­ing in 1991.

“When she started, she re­ally was one of the only peo­ple in this cat­e­gory in terms of ex­perts that were re­ally rel­e­vant,” said Katie Con­way of brand­ing f irm Siegel+ Gale. “She had great ideas, and a num­ber of peo- ple re­ally paid at­ten­tion to what she had to say.”

In 2004, Stewart was found guilty of ob­struct­ing a fed­eral in­ves­ti­ga­tion into in­sider stock trad­ing and served five months in prison.

In re­cent years, Stewart largely left the broad­cast­ing busi­ness and li­censed the com­pany’s mag­a­zine brands to Des Moines media com­pany Mered­ith Corp. af­ter strug­gling to sell ads.

The com­pany was also in­volved in a law­suit with Macy’s and J. C. Pen­ney about mer­chan­dis­ing agree­ments in 2013.

The deal with Sequential could be pos­i­tive for Stewart’s brand, Con­way said.

“Her ex­per­tise is in the con­tent she’s pub­lish­ing,” she said. “Her ex­per­tise is not in how to mer­chan­dise and dis­trib­ute these ideas.”

Shares of the com­pany plunged 86 cents, or 12%, to close at $ 6.12.

Don­ald Bow­ers

MARTHA STEWART will serve as chief cre­ative off icer of the new com­pany.

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