Often referred to as the "personification of gracious living," Stewart has been a powerhouse no matter what occupation she's chosen. The red carpet of success has unfurled before her, whether her profession be fashion model, stockbroker, caterer, or now, publicly held multimedia lifestyle entrepreneur/conglomerate.
As chairman and CEO of Martha Stewart Living Omnimedia <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MSO)") else Response.Write("(NYSE: MSO)") end if %>, whose IPO debuted on October 19th, Stewart has expanded her empire's reach into publishing (Martha Stewart Living and Weddings magazines, 27 how-to books, syndicated newspaper columns); TV and Radio (network appearances, cable TV show, and syndicated radio show); and merchandising (Kmart, Sherwin-Williams, P/Kaufmann). Have you caught your breath yet? MSO also boasts a direct-mail operation (Martha by Mail) and has ventured into cyberspace with the marthastewart.com website.
Under Martha's superwoman guidance, the company has been growing faster than a speeding bullet, reporting annual revenues of $3.9 million in 1996, $132.8 million in 1997 and $180.0 million in 1998. Retail sales of Martha merchandise totaled $763 million in 1998, an increase of 96% over 1997. Can you blame people for wanting to buy a piece of the essence of perfection?
In the recently reported 3rd quarter, the first earnings report as a public company, revenues rose to $49.8 million, up 17% from the past year, on broad-based strength in all divisions. Unfortunately, earnings fell due to increased spending to develop the Internet business. No doubt that bearish Rick will dig his clammy paws deep into the short-term losses incurred from this investment.
But spend they must. Future riches for Martha's company lie on the Web, and as Martha herself would say, "It's a good thing!"
Already that business segment posted the largest leap of all MSO tentacles, tripling to $7.0 million from $2.3 million during the same period last year, while the number of registered users rose from 925,000 at the end of August to 1 million at the end of the third quarter.
"Happiness of the domestic fireside is the lot of the mass of mankind," said Thomas Jefferson. And this "mass" of domestic goddess wannabes are the reasons MSO has a future on the back of the brazen bull. According to Advertising Age, women control or influence more than $2.4 trillion, or 80 percent of the $3 trillion spent by U.S. consumers. And these tree-trimming, stencil-using, slipcovering consumers, of whom I'm one, can't help but spend their dollars duplicating the tricks and skills of the mistress of the homemaking milieu, the wunderkind of winter wonderlands, the vixen of velvet wreaths.
It's Martha Stewart's name, synonymous with beauty and perfection, that will lead the company towards, and hopefully beat, its projected long-term growth rate of 21.75%. Name recognition translates into money. And she won't be giving up her power too quickly -- Martha's stake in MSO gives her control over about 96% of the voting power.
There is some risk in MSO: if anything happens to Martha, it could spell doom for the company -- as George magazine so tragically discovered earlier this year. But don't worry too much� the company carries "key executive life insurance" on Stewart with an aggregate coverage of $67 million and disability insurance with coverage totaling $55 million. Plus, a large effort has been made to leverage the other talent in the company, as Martha Stewart's brand is no longer simply a person, but a statement of domestic dominance.
MSO has assembled a very competent management team and has very little debt. Development of MSO's Internet presence will result in mega bucks through substantial advertising and e-commerce revenues at reduced costs. Martha has strongly committed to growing her Internet area -- and while the past is no indicator of the future, it sure has come to pass that whatever Martha wants, Martha gets.
If you'd like to see Martha's perfectionism in action, watch tonight's Christmas special, where special guest Aretha Franklin might surprise us with an inspired rendition of "You Make Me Feel Like a Natural Woman" -- a logical result from following Martha's lead. You can learn the secrets of making sugar cookies -- and perhaps transform them into millions of dollars.
Martha Stewart's perseverance, skills, intelligence, perfectionism, and survivor instinct will no doubt lead investors into the winner's circle. MSO... it's a good thing.
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