It’s seven o’clock on a grey Saturday morning in November, but the tension rippling through the room is palpable. For several hours, people have been bustling around the restaurant and bar area of a downtown Toronto hotel, artfully arranging displays of pots, pans, dishes and cutlery. Fresh fruit juices are decanted into gleaming glass pitchers, warm muffins are nesded into linen-lined baskets, fragrant blossoms are elaborately arranged to look casual. After all, this is no coffee klatsch: this is a Martha Stewart kitchenware product launch.
When she finally arrives on the scene, delayed almost one hour by the ferry from Toronto Island Airport where her private jet has landed, Martha makes it clear she’s not amused by the experience. Flowever, as her many handlers hover anxiously, proffering caffe lattes and water, she quickly regains her composure and her laser-like focus on the subject at hand: Martha Stewart Living Omnimedia Inc. and its increasingly diverse retail division.
Dressed in an austere grey suit and brown Hermès riding boots, Stewart is imposing and in complete control of her environment. She speaks in a low, authoritative tone, frequently referring to herself in the third person. It’s a trifle disconcerting, but then, there aren’t too many people who are corporate conglomerates and international brand names, as well as individuals.
By now, her story is as well-known as her trademark catchphrase, “It’s a good thing.” A history graduate and former stockbroker, she began a catering business in the kitchen of her restored, 19th-century Connecticut farmhouse in the early 1970s. That led to the publication of several cookbooks and guides for weddings and entertaining. She launched her magazine Martha Stewart Living i n 1991 with backing from Time Inc. Five years later, Martha Stewart Inc. became Martha Stewart Living Omnimedia, reflecting her push into cable television, syndicated newspaper columns, how-to books and radio shows. In October, 1999, she returned to Wall Street, taking her company public while retaining majority control.
At a time when convergence has become the hot, new thing for media companies, Stewart is well ahead of the game. Long ago, she figured out the benefits of distributing proprietary content across a range of media—as well as the aggressive use of cross-promotion and strong branding. “Initially, we worried that moving into television would cannibalize our magazines,” she admits. “But we quickly discovered that it only contributed to growing circulation.”
In fact, while magazine industry circulation and advertising sales have come under pressure, Stewart’s publishing arm booked a 6.5-per-cent increase in circulation in its second
fiscal quarter, while ad pages increased by 22 per cent. She has recently expanded the scope of her publishing division, taking Martha Stewart Living monthly and adding a quarterly magazine focused on babies. “We have a strong niche market in weddings, so babies are a natural next step in the whole process,” she explains. She says she is also contemplating a move into the leisure travel market.
On the retail side, Stewart has partnered with Kmart and Sears, Roebuck & Co. in the United States and Zellers in Canada to bring her line of housewares and bed linens to market. She has developed her own line of paints with Sherwin-Williams, which are sold along with Martha Stewart garden tools and her line of outdoor furniture. “We developed products as a natural offshoot of the ‘how-to’ focus in our magazines and television shows,” she says. “It generated huge interest and demand. We now enable homemakers to accomplish the projects we demonstrate. We’ve built our brand based on our reputation as providers of trusted content.”
With the North American market now well-saturated by her advice, products and presence, Stewart is already expanding her global media reach. Her programs are currently dubbed and distributed through Europe and Latin America. And in early October, she rolled out her television series (with plans for a magazine) in Japan. She insists that her brand image has proven to be easy to export because “there’s been a real blurring of all cultures and geographic lines—globalization is certainly a reality in the domestic arts.”
But one area that has proven to be more of a challenge is the Internet. Martha Stewart Living Omnimedia allocates about $48 million annually—about 14 per cent of total sales last year—for online operations, including a Web site and product sales through BlueLight.com. Although the division is still losing money, Stewart insists it’s a core element in her corporate strategy. “Sure we’ve had a shake-out,” she admits. “But it will grow from here. And our strong brand has protected us from the worst.”
Analysts remain bullish on the prospects for the company, forecasting cash-flow growth of up to 20 per cent a year over the next several years and a doubling of Omnimedia’s share price. There is, however, the persistent issue of extreme corporate leverage—the focus on just one person.
Does that emphasis concern Martha Stewart herself? As with every other detail of her operation, it has been attended to. “There’s now a corporate structure in place, we’ve addressed succession head on,” she declares. “We’re wellrepresented by others editorially, in merchandising and distribution.” For shareholders and fans alike, “it’s a good thing.”
The story you want is part of the Maclean’s Archives. To access it, log in here or sign up for your free 30-day trial.
Experience anything and everything Maclean's has ever published — over 3,500 issues and 150,000 articles, images and advertisements — since 1905. Browse on your own, or explore our curated collections and timely recommendations.WATCH THIS VIDEO for highlights of everything the Maclean's Archives has to offer.