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MASS WITH CLASS. To dub oneself "a good spokesperson" after personally raising domestic chores to high art while forging a media-and-merchandising empire might sound ridiculously modest. But who can blame Stewart for undercutting her own role in the company? Ad sales are down, and the stock price is about half what it was before the scandal broke. "What we need now is that growth rate," she admits. "We can't have that without a lot of good will."
The potential to recoup investor's good will is there. And the business is forging ahead. Everyday Food, for example, represents MSLO's push into mass-market magazines. After test-launching the digest-size publication, the company has decided to roll out 10 issues a year starting in September, 2003.
Unlike Martha Stewart Living, which targets a more affluent demographic, Everyday Food will be aimed at the supermarket crowd. It downplays Stewart's name and -- with colors like burgundy, orange, and mustard yellow -- is a distinct departure from her signature pastel palette. "Visually, we wanted to use a new brand," explains Design Director Scot Schy, who likes to dub the feel of the recipe book as "mass with class."
"KIND OF OBVIOUS." No one seems more eager to diverge from the Martha look than Stewart herself. "Look, I have an orange watch today," she beams, before stretching out her feet. "Look, Scot. I'm wearing orange shoes today." For Stewart, Everyday Food is the wave of the future. "I can envision that this kind of magazine would appeal to the people who spend dollars on our Everyday products" at Kmart," she says.
Patrick also has high hopes, noting that "it seems kind of obvious that, if food is successful, we have these other content areas that could also go mass market." The new CEO obviously has to hedge her enthusiasm, lest investors confuse it with inappropriate forward-looking statements.
Given MSLO's diminished share price and Stewart's lessened title, some might wonder if the founder rues the day back in late 1999 when she took the company public. Stewart insists that, for whatever hassles it may have produced, a stock exchange listing "brought home to the American public that finally the domestic arts could be perceived as a business, as a viable occupation."
Patrick adds that it also enabled MSLO to make talented employees part-owners in the business. "That's a wonderful thing," she says. "What's a shame is that the stock has gone under pressure because of the situation."
BEAUTIFUL BALANCE SHEET. Stewart says it's "drastically unfair," noting that "someone told us the other day they have not seen such a strong balance sheet in a long time in a lot of companies. And this balance sheet is there and has been there all along." But even she admits that it's going to take more than a nice balance sheet to woo investors. "They'll come back when our revenues and earnings can show the kind of improvement that is necessary for them to want to come back," she says. "This is business."
Moreover, the woman who prides herself on teaching Americans how to live the good life says she has learned some things herself over the past year. "I've been extremely heartened and feel really good about the way that everybody has behaved here. That's for sure," she says, then pauses and seems at a rare loss for words. "It's incredible to me. When you face such difficulties, it's difficult. But I'm very heartened."
Copyright 2003, by The McGraw-Hill Companies Inc. All rights reserved.
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