Marth Stewart
A Brand in Crisis
Born / Martha Helen KostyraAugust 3, 1941 (1941-08-03) (age69)
Jersey City, New Jersey, USA
Ethnicity / Polish American
Alma mater / Barnard College
Occupation / Entrepreneur; television and magazine personality
Net worth / US$638 million (2011)
Spouse / Andrew Stewart (1961–1989) (divorced)
Children / Alexis Stewart (b. 1965)
Relatives / Jude (Granddaughter) born 2011
Signature
Background
In 1967, she became a stockbroker. She was successful, but left the profession in 1973
Stewart and her husband decided to move to Westport, Connecticut. They purchased and undertook a restoration of the 1805 farmhouse on Turkey Hill Road that would later become the model for the TV studio of the Martha Stewart Living show. Stewart and her husband undertook the entire venture by themselves. During the project, Stewart's panache for restoring and decorating became apparent.
In 1976, Stewart started a catering business in her basement with a friend from her modeling days, Norma Collier. The venture quickly became successful, but soured when Collier alleged that Stewart was difficult to work with, and was also taking catering jobs on the side. Stewart soon bought her portion of the business. Stewart was also hired as the manager of a gourmet food store, the Market Basket but after a disagreement with the owners at the mini-mall she was forced out and opened her own store.
1977, Stewart saw entertainment success after being introduced to Alan Mirkan the head of Crown Publishing group. She was requested to write a cookbook.
The result was her first book, Entertaining, ghostwritten by Elizabeth Hawes. From there, word of her skills and business grew and Entertaining became a New York Times Best Seller, and the best-selling cookbook since Julia Child and Simone Beck's Mastering the Art of French Cooking, released two decades earlier
Following Entertaining's success, Stewart released many more books under the Clarkson Potter publishing imprint, including
Martha Stewart's Quick Cook (1983),
Martha Stewart's Hors D'oeuvres (1984),
Martha Stewart's Pies & Tarts (1985),
Weddings (1987),
The Wedding Planner (1988),
Martha Stewart's Quick Cook Menus (1988),
And Martha Stewart's Christmas (1989), among others.
During this time, she also authored dozens of newspaper columns, magazine articles and other pieces on homemaking, and made numerous television appearances on programs such as The Oprah Winfrey Show and Larry King Live. Andrew and Martha Stewart divorced in 1989.
In 1990, she also signed with Time Publishing Ventures to develop a new magazine, Martha Stewart Living, for which Stewart would serve as editor in chief. The first issue was released in late 1990 with an initial rate base of 250,000. Circulation would peak in 2002 at more than 2 million copies per issue. In 1993, she began a weekly half-hour service program based on her magazine, which was quickly expanded to a full hour, and later to a daily format, with half-hour episodes on weekends. Stewart also became a frequent contributor to CBS's The Early Show, and starred in several prime time holiday specials on the CBS network.
On the cover of the May 1995 issue, New York Magazine declared her as "the definitive American woman of our time".
Martha Stewart Living OMNIMEDIA
In September 1997, Stewart, along with the assistance of business partner Sharon Patrick, was able to secure funding to purchase the various television, print, and merchandising ventures related to the Martha Stewart brand, and consolidate them into a new company, named Martha Stewart Living OMNIMEDIA. Stewart served as chairwoman, president, and CEO of the new company and Patrick became Chief Operations Officer. By organizing all of the brand's assets under one roof, Stewart felt she could promote synergy and have greater control of the brand's direction through the business's activities. That same month Stewart announced in Martha Stewart Living the launch of a companion website and a catalogue business, called Martha by Mail. The company also has a direct-to-consumer floral business.
On October 19, 1999, Martha Stewart Living OMNIMEDIA went public on the New York Stock Exchange under the ticker symbol MSO. The initial public offering was set at $18 per share, and rallied to $38 by the end of trading, making Stewart a billionaire on paper. The stock price slowly went down to $16 per share by February 2002. Stewart was then and continues to be the majority shareholder, with a commanding 96% control of voting power in the company.
Insiders Trading Scandal
December 27th 2001:
Martha Sells some stocks in ImCloneone day before FDA refused to review ImClone Systems Cancer drug Erbitux.Thecompany’s stock tumbled after the news of non review.
The Scandal also touched the following
John Landes Company Counsel, he dumped 2.5 million worth company’s stock on 6th of December.
Ronald Martell, Vice President marketing ImClone, sold 2.1 million worth of company stocks on 11th of December.
According to U.S. Securities and Exchange Commission (SEC), Stewart avoided a loss of $45,673 by selling all 3,928 shares of her ImClone Systems stock on December 27, 2001, after receiving material, nonpublic information from Peter Bacanovic, who was Stewart's broker at Merrill Lynch. The day following her sale, the stock value fell 16%.
On June 4, 2003, Stewart was indicted by the government on nine counts, including charges of securities fraud and obstruction of justice. Stewart voluntarily stepped down as CEO and Chairwoman of MSLO, but stayed on as chief creative officer.
She went on trial in January 2004. Prosecutors showed that Bacanovic had ordered his assistant to tell Stewart that the CEO of ImClone, Samuel D. Waksal, was selling all his shares in advance of an adverse Food and Drug Administration ruling. The FDA action was expected to cause ImClone shares to decline. After a highly publicized five-week jury trial that was the most closely watched of a wave of corporate fraud trials, Stewart was found guilty in March 2004 of conspiracy, obstruction of an agency proceeding, and making false statements to federal investigators, and was sentenced in July 2004 to serve a five month term in a federal correctional facility and a two year period of supervised release (to include five months of electronic monitoring).
Bacanovic and Waksal were also convicted of federal charges and sentenced to prison terms. Stewart also paid a fine of $30,000.
In August 2006, the SEC announced that it had agreed to settle the related civil case against Stewart. Under the settlement, Stewart agreed to a five-year bar from serving as a director, CEO, CFO, or any other officer role responsible for preparing, auditing, or disclosing financial results of any public company. In June 2008, the UK Border Agency refused to grant her a visa to enter the United Kingdom because of her criminal conviction for obstructing justice. She had been planning to speak at the Royal Academy on fashion and leisure industry matters.
Come Back
These notes shall not be considered as handouts, they are just detail of the syllabus. Books should be used for proper study.