Former media tycoon and do-it-yourself maven Martha Stewart sold her unprofitable lifestyle business Martha Stewart Living Omnimedia, for a near clearance price.
Once valued at $2 billion after it went public at the height of the dot-com bubble, the company is selling for a much smaller yet still respectable $353 million in a cash-and-stock deal to Sequential Brands Group, which licenses and promotes a number of brands such as pop star Jessica Simpson’s collection and bedroom retailer Linens N Things.
Martha Stewart herself is expected to stay on as chief creative officer of the brand and will also still be a “significant stockholder” of the new company once Sequential and Martha Stewart Living have combined. Showing their faith in the domestic diva, Ms Stewart will also be nominated to serve on Sequential’s board of directors.
Stewart still owns 49% of her company’s Class A shares, making her future ownership stake in the combined company logical.
“This merger is positioned to further the growth and expansion of the unique Martha home and lifestyle brand,” Martha Stewart said in a statement. “With our media business operations now successfully transitioned to Meredith, we now have the opportunity to tap into Sequential’s expertise and resources to expand our merchandising business both domestically and abroad.”
Since Ms Stewart was jailed for insider trading in 2004 the company has faced some tough challenges and remains mired in annual losses and sliding sales. Total sales fell to just $142 million last year from $231 million in 2010.
The company has reported an annual loss for every year during that five-year stretch due to declines in circulation and advertising revenues for the company’s magazines, a trend affecting the broader print magazine industry as well.
Despite being an ‘omnimedia’ company, the brand never fully transitioned to digital and instead refocused in the last few years on retail products bearing Ms Stewart’s iconic name.