Wall Street is abuzz with talk that Sequential Brands Group, a company that specializes in acquiring and licensing big-name brands, is close to a deal to buy Martha Stewart Living Omnimedia. The Wall Street Journal, Forbes, Business Insider, The Huffington Post and CNBC have all reported over the last two days that a special committee is in talks to sell MSLO to Sequential Brands Group, but there has not yet been any confirmation from either side. Stock in Martha Stewart's company surged on the news by 26% on Wednesday.
Merchandising is the only area of the company that has remained strong, but even within that category there have been stumbling blocks; furniture lines that never materialized, a litigious battle between JC Penney and Macy's regarding rights to Martha's home merchandise lines, and various product lines at The Home Depot that were pulled from store shelves, such as the Martha Stewart paint line.
By selling, Martha would be giving her company a second chance. Martha owns 49% of the company's stock and, as the non-executive chairman and controlling shareholder, has final say on what happens to the company she built from the ground up. The sale itself would likely send stock in MSLO surging to heights it hasn't seen in years, making Martha an even wealthier woman than she already is. It would also guarantee - at least in principle - a steady ride ahead for a company that has been treading a bumpy road for far too long with new corporate overseers and managers expanding licensing agreements to ensure the Martha Stewart monicker survives.
Martha would still likely maintain controlling interest and would certainly be very involved at the company - as would most of her teams in merchandising, publishing and broadcasting. My only concern would be with quality control. The idea of a giant company selling Martha's name and face to any manufacturer who wanted to buy it is a bit disconcerting for a longtime fan, such as myself, who enjoys the "specialness" of the Martha Stewart name and brand. I don't want Martha Stewart Happy Meals. I don't want Martha Stewart hair dye. The fear is that the brand will become diluted through endless (re: meaningless) licensing deals and, in turn, cheapened through ubiquity. I have always trusted Martha's eye for standards, quality and good taste. I would not want to see that disappear.
And so, we wait...
There has been no confirmation of any actual sale, although it is looking more and more like that is the direction the company will be taking: confronting its shortcomings by letting a much larger and perhaps more-capable company manage its affairs and lead it to profitability. What are your thoughts? Should Martha sell her company?