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Design maven Martha Stewart sells namesake company for US$353m
[NEW YORK] The company of Martha Stewart, whose suburban American Dream lifestyle and decor vision swept the US in the 1990s, announced Monday it would be bought by a brand manager for US$353 million.
Martha Stewart Living Omnimedia said it had accepted the US$6.15 a share, half-cash half-stocks offer from Sequential Brands Group, which manages mainly clothing brands.
The two companies said that Stewart, 73, who founded the company in 1997 and remains a key shareholder, would stay on as chief creative officer.
After more than a week of rumours of the looming buyout offer, the boards of the two companies said they had approved the proposal.
"This is a transformational merger for Martha Stewart Living Omnimedia, the company I founded in 1997. This merger is positioned to further the growth and expansion of the unique Martha home and lifestyle brand," Ms Stewart said in a statement.
"The Sequential team is smart, hardworking, and understands the power and limitless opportunity of the Martha Stewart brand and its formidable design, editorial and marketing teams."
Sequential said the addition to its collection of brands, including Avia sports clothing, Ellen Tracy, and Linens 'n Things, would increase its sales to US$3.75 billion.
The sale comes as the homemaking brand built by Stewart from the 1980s on the back of best-selling decorating guides, cookbooks, and then wildly popular television shows, has frayed.
Stewart's style vision and advice was turned into licensed products from 1997 with Martha Stewart Living Omnimedia, which marketed everything from cake-decorating kits and kitchenware to Martha Stewart-branded wine, flooring and drapery.
The products were sold by major mass-market chains like Macy's and Home Depot, and rode on the housing boom of the early 2000s, with company's annual revenue hitting US$328 million in 2007. The company's shares soared, making Ms Stewart a billionaire.
But sales have not recovered with the housing market since the 2008 economic crisis, falling from US$231 million in 2010 to US$142 million last year.
Her daily television talk show ended three years ago and the magazines that helped build her empire, Martha Stewart Living and Martha Stewart Weddings, were handed over to Meredith, another magazine publisher, last year.
Ms Stewart lost some of her own superstar cachet with aspiring homemakers in 2004 when she was jailed for five months in an insider trading scandal that cost her, for several years, her seat on the board of her company.
Her jail time was marked by stories of helping inmates in a West Virginia prison practice yoga, collecting wild salad greens and complaints over the food served. When her time was up she left the prison in style, by private jet.
Martha Stewart shareholders gave the Sequential offer a thumb's down as less than expected Monday.
Rumours of a deal pushed the shares from US$5.10 to US$6.98 last week. On Monday they fell 12.8 per cent to US$6.10 on the New York Stock Exchange.