Just several days ago, the Wall Street Journal was among one of the first news outlets to break the story that Martha Stewart was exploring a sale of her company, Martha Stewart Living Omnimedia Inc. Sequential Brands Group was named as a possible buyer of the company and it was confirmed this morning when Sequential Brands Group agreed to purchase Martha Stewart Living Omnimedia for $353 million, or $6.15 a share.
Martha Stewart Living Omnimedia has struggled over the past few years
For full year 2014, Martha Stewart Living Omnimedia reported revenue of $141.9 million, which was down 12% from 2013 levels. To make matters worse, 2014 revenue was less than half of what the company made in 2007. The point being here is that Martha Stewart Living has significantly slumped since the Great Recession. At the time of its IPO in 1999, Martha Stewart Living Omnimedia was valued at $2 billion. The current market value for the company is $400.58 million. In other words, the company has shrunk considerably since its IPO.
Sequential Brands Group inherits merchandising, broadcasting, and magazine from purchase
Martha Stewart’s name in synonymous with homemaking, decorating, baking, etc. The majority of Martha Stewart Living Omnimedia’s business is merchandising. Stewart’s products can be found across a wide range of big box retailers such as Macy’s Inc. and Petsmart. Martha Stewart once had a thriving TV show, which added to earnings. Unfortunately, the show eventually saw its audience dwindle and was later shut down for weak rating. However, Martha Stewart Omnimedia still prints its branded magazine to consumers.
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Overall, Sequential Brands Group is buying a beaten down brand name that is extremely well known. Everyone knows the name “Martha Stewart” and Sequential Brands Group is banking on that fact, in the hopes, that it can revitalize the once great home products company. Stewart’s company has lagged considerably since 2008 and it was only a matter of time before the company would enter a sale, due to the lack of resurgence in the years following. The bottom line here is that Martha Stewart Living Omnimedia has seen better days, but hopefully under new direction from Sequential Brands Group will be able to revive the once great company.