Sale of Stewart brand
Sequential to acquire Martha Stewart Living Omnimedia in cash- and- stock deal.
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.
MARTHA STEWART will serve as chief creative off icer of the new company.