Martha Inc.: The Incredible Story of Martha Stewart Living Omnimedia

4 ideas

1. Martha Stewart Living: from Time Inc. title to public company

   Martha Stewart Living launched in 1990 as a magazine published by Time Inc. In 1997 Stewart bought the magazine and her TV operations back from Time and folded them, with her books and her Kmart merchandise line, into one company, Martha Stewart Living Omnimedia. The company went public in 1999 and its stock roughly doubled on the first day, which gave a public market valuation to a business built around one living person's name, taste and face.

2. Licensing turns a name into margin

   That left MSLO with almost pure-margin revenue and no inventory, factory or store costs. The price was dependence: the licensor's income rose and fell with the retailer's traffic and health, and Kmart's slide toward bankruptcy in 2002 exposed that risk.

3. The magazine as catalogue for the brand

   In an 'omnimedia' model, the magazine, TV show and books do more than earn subscription and ad money. They produce aspirational images that make the licensed sheets, paint and kitchenware feel desirable, and each channel promotes the others. Editorial content works as marketing for merchandise, so the value of the whole enterprise rests on the credibility of the taste-maker behind it.

4. When founder equals asset, scandal is balance-sheet risk

   When a company's main intangible asset is one person's persona, the separation between the person and the corporation disappears. Her legal trouble, reputation or absence becomes a direct hit to revenue and share price, not a private matter.

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