It's hardly surprising that Martha Stewart's been losing face, but is she about to lose her name, too? Her company, Martha Stewart Living Omnimedia
The first-quarter loss at Martha Stewart Living was $20.3 million, or $0.41 per share, compared to $4.5 million, or $0.09 per share, last year. If you take out a tax reserve of $9.3 million, the company would have reported a loss of $0.22 per share; analysts were expecting a loss of $0.20. Revenues fell 23.3% to $44.5 million. Next quarter, Martha Stewart Living expects to report a loss of $0.35 to $0.40 per share, compared to the previously anticipated loss of $0.12 per share.
It's been anybody's guess how the business would fare after Martha's conviction for her role in the ImClone
Signs have pointed to consumers' shrugging off the conviction. Indeed, its merchandise segment, though a small piece of total revenues, was the only one to show a positive trajectory at the moment -- and that segment includes a 6.5% increase in sales of Martha Stewart products at Kmart
Although Martha Stewart Living said in its press announcement that its customers are "stalwart" ones, publishing revenues -- a major business segment for the company -- fell 29.8% to $23.9 million in the quarter, which was blamed on declines in both advertising and circulation revenue.
The company said that while it won't ditch "Martha Stewart" from Martha Stewart Living magazine, it will increase its emphasis on "Living" as the actual brand. (A new magazine, Everyday Food, which has been doing well so far, is about to lose the tag line that links it to Martha Stewart Living, according to the company's conference call (transcript courtesy of CCBN StreetEvents).)
Though Martha Stewart Living Omnimedia admits that the name is important, and even shared data that shows consumers stand by it, it seems to be too rapidly stripping it out. I question the wisdom of that move.
Regardless of the mistakes Martha has made in her personal life, I, for one, don't believe that recent events will sway consumers from acknowledging the thing Martha Stewart has always done best: decorate. What's "Living" without "Martha Stewart"? It may not bring to mind decorative centerpieces and festive wreaths, but it sort of sounds same-old, same-old.
Will de-emphasizing the Martha Stewart name take some of the life out of Living? Do you want to chime in on the outlook for Martha Stewart? Talk to other Fools about the ongoing events on the Martha Stewart Living Omnimedia discussion board.
Alyce Lomax does not own shares of any companies mentioned. She can't decorate worth a darn.
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