Advertisers continue to abandon Martha Stewart, who is fighting a prison sentence she received last month, courtesy of lying to federal investigators about her sale of ImClone Systems Inc. shares.
And the more Martha fights, the more of an expensive headache she becomes, believe the executives who now run her company, Martha Stewart Living Omnimedia Inc.
In essence, all indications are that they think it would be a good thing if Martha quit fighting so the company could get back on solid footing.
The company isn’t alone. Media buyers are saying the same thing.
On Tuesday, the company that bears her name said it suffered a wider-than-expected second-quarter loss of $19.3 million, or 39 cents a share, compared with a profit of $931,000, or 2 cents a share, in the same period last year.
Analysts had predicted a loss of about 33 cents a share.
In a conference call with analysts, Sharon Patrick, president and chief executive of Martha Stewart Living, said advertisers would return only when Stewart’s legal problems are over.
That means Stewart needs to pack it in, take her lumps and do her time.
Patrick might be right.
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According to media buyers, the more uncertainty there is with Stewart, and the more attention she’s drawing to herself, the worse she’s making it for the media company–particularly the magazine that still carries her name.
“I don’t know if it’s a question of how much or how little time she does. I think everyone is waiting for the press to die down,” said a print buyer at Starcom USA, which places more magazine advertising than any other firm in the country. “They are waiting for the news to settle.”
What is helping Martha Stewart Living is that the company is being run well, even though it does have revenue problems.
Stewart, who remains the majority shareholder of the company, stepped down as chief creative officer and resigned from the company’s board.
Other board members tied to her also have stepped down in recent days. After her indictment, she stepped down as CEO and chairwoman.
As the news has gotten worse, the company has adjusted as best it could. On Tuesday, it said it would end its Catalog for Living to pare costs more. Its focus will be on its core business.
The company has been telling media buyers for months that with no debt and more than $150 million on hand, the company, namely the magazine, can weather the short-term fallout from Stewart’s public woes.
Everyday Food, a spinoff of Martha Stewart Living, has shown promise.
In essence, if the namesake magazine still is delivering on its premise, then advertisers are likely to stick with it.
“We haven’t seen a decline in the product,” the Starcom buyer said. “If the product remains intact, and the news dies down, that’s when we’ll start seeing advertisers come back.”
In the short term, though, the company’s publishing division, which accounts for more than half of its business, is in a world of hurt. In the second quarter, publishing posted revenue of $23.7 million, down from $39.6 million a year ago. Advertising and subscriptions are down.
There are no plans to veer from the Martha Stewart vision that first garnered fans, even if the company would be better off if she does her time and gets on with her life.
Martha Stewart will continue to make press for her media company.
Problem is, no one can predict what kind of press it will be. And that’s a bad thing.
Bulls’ barber shop: Chicago Bulls are doing their own version of “Barbershop.”
In a new TV campaign breaking this week from DiMeo & Co., former Bull Norm Van Lier and other characters sit around a fictional barbershop talking about Bulls games and Bulls history. The new campaign, which features a cameo of Bulls star Kirk Hinrich, sports the team’s new tagline, “Through thick and thin,” which replaces last season’s more hopeful “History in the making” line.
“A lot of the dialogue was spontaneous,” said DiMeo creative director Brett Thomas. “The actors really got into their characters.”
We can only hope the Bulls get into their characters when the season starts.
Quick hits: The New Yorker magazine’s total circulation topped 1 million during the first half of 2004–the first time that’s happened in the magazine’s 79-year history. Newsstand sales increased 3.1 percent, to 49,129, and subscriptions jumped 4.8 percent, to 954,077, according to numbers the magazine filed with the Audit Bureau of Circulations. The 1 million mark has been a key number for the magazine in its struggle to attract more advertisers. … “People find it hard to believe that I mow my own lawn, but I love doing it,” said Green Bay quarterback Brett Favre. So Tuesday, he signed on to be Simplicity Manufacturing Inc.’s spokesman for Snapper lawn mowers. Ads featuring the Packers’ star are being developed with the help of brand development and communications firm Lindsay, Stone & Briggs, Madison, Wis. The agency reports that Favre, believe it or not, is a “lawn mowing enthusiast” who likes nothing better than to cut the grass at his home in Mississippi during the off-season.
Whatever makes you happy, Brett.
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