After initiating a search for investors and potential partners with Blackstone Advisory Partners in May 2011, Martha Stewart Living Omnimedia announces the resulting partnership. Retailer J.C. Penney invests $38.5 million in the multi-brand company, and will hold a 16.6 percent stake. This equates to 11 million new issued shares of Class A common stock, priced at $3.50 a share.
In February 2013, Martha Stewart retail outlets will be erected in the majority of JCPenney department stores. Retail items will be sourced and marketed by J.C. Penney. A MSLO e-commerce site will also launch in 2013, and will include J.C. Penney merchandise, in addition to other items selected by Martha Stewart staff.
Lisa Gersh, president and COO of MSLO, marks her six-month anniversary with the company with this announcement. “One of the things we said at the time [of the Blackstone announcement], and I said very clearly, was we were reaching out to Blackstone to explore strategic partnerships. I believe that much of the press was written that we were selling the company. I was very consistent for the past six months that we were exploring strategic partnerships,” Gersh tells FOLIO:. “This is the partnership that has resulted from this exploration, and we now consider the Blackstone process to be complete.”
In late November, MSLO announced a partnership with e-commerce site OpenSky. Gersh defines the difference between the OpenSky partnership and the e-commerce site to launch in 2013, “We think OpenSky is a great way to look at the social media space. The [new] e-commerce space will have all of our Martha Stewart products available. At OpenSky, there are just a few products curated by Martha that are available.”
As a result of this partnership, MSLO is expecting to receive over $200 million from J.C. Penney over the contractual 10-year period. The retailer will also sit on Martha Stewart Living Omnimedia’s board of directors.
Gersh says there is not an exact picture of how the pop-up retail locations will look quite yet. “What we want to do, everyone’s vision is the Apple Store redefined. The retail experience of being able to go in, talk about the product and get advice from experts,” she says.
This announcement marks yet another partnership between the retailer and a major media brand. Earlier this year, J.C. Penney and Hearst’s Esquire teamed up to develop CLAD, an e-commerce site curated by Esquire staff and CLAD’s buying team. According to the CLAD website, “J.C. Penney is an investor in CLAD, not an owner. CLAD will debut under J.C.Penney’s newly formed Growth Brands Division, a business unit created to pursue high potential opportunities.”
Of the MSLO partnership with J.C. Penney, Gersh says, “I’m glad we did it, and I’m sorry it got taken for the fact that the company was for sale, because we sure spent a lot of time answering that question. And now the question’s answered.”