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Is Martha Stewart’s Brand Worth Fighting Over?

03/28/2013

CompetitionThe very public battle between Macy’s and JCPenney’s over Martha Stewart’s brand has been nasty. Nasty enough to land JCPenney’s CEO Ron Johnson in the tabloid news.

One has to wonder if the brand is really worth all the expense of lawyers, lawsuits, trials, etc.

JCPenney in December 2011 acquired a 17% stake in New York-based Martha Stewart Living for $38.5 million as the department-store chain seeks to revive sales with new mini-stores dedicated to Martha Stewart and other brands.

Macy’s, which has sold Martha Stewart-branded home goods since 2007, sued her company in January 2012, saying it had the exclusive right to sell items in certain categories including bedding and cookware. Macy’s sued JCPenney about three months later.

The legal issues of this battle are less fraught than the ones in her criminal trial in 2004, when she ended up being convicted on charges of lying to government investigators about a stock sale. But that conviction hung in the air as she testified, as a near-death experience for the company she founded, Martha Stewart Living Omnimedia.

“It could’ve taken down the brand; it did not,” Ms. Stewart said in her testimony. “But I must tell you that rebuilding is a lot harder than building.”

Part of the reason that she seems embattled — her media empire is shrinking fast — is that she won her corner of the culture war. When you go into Target or Walmart and see a sage green towel that is soft to the touch, it may not carry her brand, but it reflects her hand. Her tasteful touch — in colors, in cooking, in bedding — is now ubiquitous. Unfortunately for Martha, she just doesn’t own that approach…nor does she make money off its sales.

Right now, Martha Stewart Living Omnimedia’s stock is $2.63 a share, down from $4.45 a year ago, with a teaspoon-sized market capitalization of $176.40 million. And, because it’s Martha Stewart, the company gets all the scrutiny of a public one, which has been brutal on occasion, but little benefit in terms of capital or operational muscle.

Martha has taught consumers tasteful consumption. Once taught homemakers everywhere have put their own spin on the concept and run with it.

Ironically it appears neither Macy’s nor JCP seem to understand one basic factor about this. In the end Martha Stewart is in it for her own brand…not for either of theirs. The sooner Macy’s and/or JCPenney’s come to that realization the better it will be for their own brands.

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