She’s successfully guided her division through a scandal-induced downturn to help the company reach its first profitable quarter in 2005.
There’s nothing like a little jail time to tarnish an image, especially if that image is based squarely on one as wholesome and whitebread as Martha Stewart’s. Yet Stewart’s namesake company, Martha Stewart Living Omnimedia, and particularly its publishing division, have proven remarkably resilient. And Lauren Stanich, president, has led a notable comeback. The company overall experienced record growth in fourth quarter 2005, which was its first profitable one in a long time, but it was the publishing division that saw the most profound changes.
According to a fourth quarter 2005 earnings statement, overall company revenue increased 40 percent, to $84.5 million, and operating income before depreciation and amortization increased $13 million, to $11.7 million. Stanich’s publishing division saw revenues increase 57 percent to $41.1 million over same period in 2004.
Stanich, a 15-year veteran of MSO, points to customer loyalty as key to the company’s turnaround. "We had incredible strength in our circulation that we were able to sell to advertisers."
This, in turn, provided leverage to the sales teams, which Stanich expanded in early 2005. Each title gained a publisher and a supporting team, a significant build-out from what used to be one centralized sales organization.
Clients;those who hung on and those who bailed during the scandal;got down-home treatment on Martha’s return from jail, too. "We did a lot of entertaining of clients at Martha’s house when she came back," says Stanich. Among those returning to the fold were Toyota, Crate & Barrel and Honda.
The extra attention has paid off. At flagship title Martha Stewart Living ad pages were up 133 percent in Q4 2005. The trend is continuing in 2006;MSL pages are up 78 percent and revenue is up 97 percent for the first two months this year, per PIB. At the time of Martha’s return in March 2005, MSL was down four percent in revenue and 10 percent in pages, per PIB.
VITAL STATS: Martha Stewart Living Omnimedia’s publishing division bounced back in a big way. Flagship Martha Stewart Living ad pages were up 133 percent in 4Q 2005.