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Martha Stewart Omnimedia is omnipresent

Six years ago, Martha Stewart was behind bars, serving five months for stock-trading violations. Today, she is everywhere from Macy's to Home Depot to KB Home.
Image: Martha Stewart Debuts Live at HSN on July 19
Martha Stewart is currently barred from serving as a director of her namesake company and is allowed only limited involvement. AP
/ Source: contributor

Six years ago, Martha Stewart was behind bars, serving five months for stock-trading violations. Today, she is everywhere from Macy's to Home Depot to KB Home.

Want to send flowers? Send a Martha Stewart Happiness Bouquet (1-800-Flowers). A little wine perhaps? Drink a Martha Stewart Vintage Chardonnay (E. & J. Gallo Winery). Do you own a dog? Buy a Martha Stewart Leather Dog Harness (PetSmart).

Today, Martha Stewart Living Omnimedia is omnipresent. How did the company claw its way back into consumers’ lives?

It bulked up partnerships and added to an ever-widening variety of merchandise with the Martha Stewart stamp. In tying Stewart products to a way of life instead of Martha herself, Martha Stewart Living Omnimedia may have made its domestic goddess figurehead obsolete.

In the absence of Stewart, her namesake company has relentlessly worked to turn its merchandise – one of its largest sources of revenue – into a lifestyle. Want a home designed by Martha, decorated with Martha Stewart furniture and painted with Martha Stewart paint? It’s possible.

According to Charles Koppelman, executive chairman of Omnimedia, the company’s strategy was to "trade in 1,200 mediocre environments for over 6,000 of the best-managed retailers in the country.” The brand proposition, according to Koppelman, is affordable luxury.

When Omnimedia moved away from its Martha-brand following her 2004 trial, it was able to become a company whose products don’t rely on a person, said Robert Passikoff, president of research consultancy Brand Keys.

“The brand is no longer held hostage to the foibles of a human being,” he said. “The brand stands on its own. There are very few brands like that.”

The company's efforts to separate its products from the criminal stain of its former CEO may be gaining traction, although the enterprise is still losing money. The company lost $1.2 million in the latest quarter, compared with a loss of $6.4 million in the same quarter a year earlier. Revenues were roughly flat with year-ago levels.

As for Stewart’s personal brand, Passikoff said it had gone from the highest level of brand equity Brand Keys had seen in 2001 to her being ranked worse than Enron in 2004 after her criminal conviction. Today “her levels of brand equity are higher than when she was found guilty, but they are lower than they were originally,” he said.

While Stewart may still be the face of Omnimedia’s products, its central appeal lies elsewhere, especially for those looking to launch new products, he said.

"A 400 thread count sheet is a 400 thread count sheet, and the only difference is the palette of colors available and the label that’s on the sheet," he said. "And therein lies the difference. The added value becomes the brand itself.”

The five-year bar the SEC put on Stewart from serving as a director of a public company will be up next year, meaning Stewart could once again take a more active role at the company. While investors may be pleased, Passikoff said consumers would be indifferent if she resumed serving as a director or officer.

“What if she went to her house in Connecticut and you never saw her again and she never said anything to anyone about it, would you know?” he said. “Probably not. There are people who are devoted to her as a person, but from a branding perspective it’s a good, solid lifestyle brand.”