Despite a history of troubling headlines and lagging business, Martha Stewart Living Omnimedia, Inc., has been given a chance to start again. Sequential Brands Group, Inc. and its far-seeing leader, Yehuda Shmidman, have made a bid to acquire the failing company, whose sales have dropped steadily since 2007.
Shmidman and Stewart are already cooking up new plans for the company under Sequential. Stewart will serve as the Chief Creative Officer of her brand at Sequential and is expected to join the Sequential board to help steer the future of the business as a whole.
A different kind of acquisition. Sequential is a different kind of company, so this is a different kind of acquisition. Instead of buying the brand to gut it and take it in an entirely new direction under its own people, the goal of a licensing company like Sequential is to allow the company to continue more or less untouched. The new team will simply help refocus the branding efforts of Martha Stewart Living Omnimedia, Inc. and improve any parts of the business that are failing completely.
For its efforts, Sequential will get a percentage return on the sale of all branded Martha Stewart merchandise. The company intends to expand the brand to international markets like China, where it’s expected to be received well.
Sequential is making moves. This will be Sequential’s biggest single take-over, but just one of nine in the last two and a half years. In that short period of time, Shmidman has grown the company from a sub-$25 million company to a company worth more than $663 million on the S&P.
For Martha Stewart stockholders, the deal isn’t as sweet, but they should be pleased to be walking away with a $6.15 per share cash and stock offer. Considering that the stock’s value at market close the Monday following the offer was just $6.12, they should be happy to be getting out of their investments at all as Martha Stewart Living Omnimedia, Inc. continues to decline.
Even though Martha Stewart Living has requested a 30 day “go-shop” period, the chance of finding a higher offer is slim. Shmidman’s efforts as CEO of Sequential has so far yielded enormous fruit, but it remains to be seen if he can raise the sinking ship that is Martha Stewart Living.