Martha StewartEssay Preview: Martha StewartReport this essayAbstractThe career of Martha Stewart, a second-generation Polish immigrant in America, who fashioned herself into a lifestyle and housekeeping expert. Her business empire, which was named after her, was involved in publishing, television shows, retail merchandizing and direct selling. In December 2001, she sold about 4000 shares of Imclone, a biotech company, a day before its share prices fell, (due to FDAs rejection of its application for a new cancer drug). When news of this sale came to light in June 2002, she was suspected of making the sale on the basis of non-public inside information. This controversy had a negative impact on her business. In this context, analysts questioned the wisdom of associating a company too closely with a person.
“Martha Stewart built a small catering business into a media empire, becoming one of Americas most successful female entrepreneurs by telling people how to entertain, cook and decorate their homes”. (Profile of Martha Stewart)
“Using skills such as gardening, cooking baking and sewing learned from her Polish immigrant family. Stewart became an iron-willed perfectionist with an eye for detail and innovation”. (Profile of Martha Stewart)
“She was born Martha Kostyra in New Jersey 1941, one of six children of a schoolteacher and a pharmaceuticals salesman. She worked part-time as a model while she studied art, European history and architectural history at Barnard College in New York”. (Profile of Martha Stewart)
In 1967 she became a stockbroker on Wall Street. When recession swept stock markets in 1973, Stewart left the brokerage and moved her family to Connecticut.
She established her own catering business in 1976, and her media empire took its first step with the publication of her book Entertaining in 1982.1987 she became a spokeswoman for Kmart after several best selling book and a PBS television special. Her style seemed at odds with the discount retailer, but the deal raised her profile to a new level. Kmart had found an exclusive brand that yielded sales of home decorating and kitchen items.
Martha had visions and goals. She wanted to publish a magazine just like her book. A book to show how to decorate, cooks, bake, garden and craft. Her dream became true in 1990. In 1996, she was named one of “Americas Most Influential People”.
Marthas Living Omnimedia was created in 1997 she had to have control.She has never-ending supplies of energy and ideas and she will continue to influence women all across the world.“The brand as we know it is dead. Any brand thats built exclusively around single personality cant survive something like this”. (Howard Davidowitz)Shares of Martha Stewart Omnimedia tumbled nearly 22 percent following the verdict. Trading was temporarily halted by the New York Stock Exchange just prior to the verdict announcement. Before the halt, shares had been up sharply Friday.
“Martha has shown patience and good humor in the face of the criticism and satire that are the inevitable lot of public figures in the mass media, but in 2003 she as confronted with a far greater challenge, an investigation of her personal stock trading by the Justice Department and the Securities Exchange Commission. Although she maintained her innocence of all changes, she was brought to trial in the first months of 2004. The court dismissed the original accusation of insider trading from which the other charges stemmed, but in 2004 a jury found Martha guilty of misleading federal investigators and obstructing an investigation. She appealed her conviction; she served a five-month prison sentence. The company she founded continues to thrive, and after her release she resumed her business career. Whatever she may yet accomplish, Martha Stewart has had more influence on how Americans, eat, entertain, and decorate their homes and gardens then any one person in our history”. (Multi-Medi Lifestyle Entrepreneur)
Martha Stewart Omnimedia (MSO) balance sheet for the most recent quarter, June 2005, shows total assets at $ 249.2 million. This figure is down a bit from the $249.6 figure in March 2005 quarter ending period, resulting in a 1 % decrease in total assets. The company had $ 28,2 million in cash and cash equivalents. Accounts payable increased from $ 20.3 million in March 2005 to just over $ 23.5 million at quarter ending June 2005. The change in accounts payable, resulted in a 14% increase in liabilities. Looking at net sales, it appears the company has experienced some fluctuations in net sales over the past three quarters. Net sales for December 2004 were $ 60.2 million. Net sales for March 2004 declined to $ 38.7 in March 2005 but has shown signs of improvements with June 2005 quarter ending reports at $ 46 million. Net sales for June 2005 are still below the December 2004. Decembers high net sales may be attributed to increased sales during
n. of 2006, which resulted in higher price increases in the first half of this year, but the company appears to be working at profitability. The company did not realize the decrease in the share price as a percentage of the overall increase in sales due to recent increases in sales.
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The company does not plan to reduce its dividend in any meaningful way.
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Martha Stewart’s Board of Directors and General Counsel
Martha and John Stewart were co-founders of the company with Bill Stewart on October 2, 1996 prior to the creation of the board of directors in July of 2003. The couple was named general counsel to the board in a resolution of July 14, 2003 the day after Mrs. Stewart’s death and for a period of one year prior to the adoption of the resolution of July 14, 2003. The two had held an elected position since the beginning of the year, and had been together at a time when Martha was the sole board member.
Martha attended the University of Washington School of law as a freshman and later joined the Board of Advisors, where she became assistant general counsel of the law firm of Hausbach & Buss. At that appointment, the two worked closely together during the period immediately preceding she became chief counsel. Her job title was interim general counsel as the latter was transferred to Martha Stewart.
Bill served as deputy chief counsel for both Mr. and Mrs. Stewart until the September 2005 election. Although Jane worked as a senior adviser and chief counsel with Bill Stewart’s board of trustees, Bill’s first duties were to oversee Martha’s legal research and to review all legal documents and work on other related matters such as education. Although there were other duties, there was no specific recommendation to become an attorney. Bill enjoyed a strong work relationship with his wife Jane and had a high-level liaison with Jane, who was a member of the board of trustees under the umbrella of the American Lawyer Foundation.
On February 19, 2003, as Martha Stewart’s brother James went on retirement, Bill joined his former colleagues on the company and received their first round of raises and leave.
– A very different generation from what we’ve grown up with has become Martha Stewart
Bill Stewart and his wife Martha Stewart met at the Washington Institute for Law and Technology that year, and began working together in March 1993 for a short time. Martha graduated with an engineering degree in 1976 and had completed a three-year master’s degree in business administration. Martha began to see the world more clearly within the Justice Department as a result of the Supreme Court’s decision in Dyer v. FEC. Martha Stewart and her husband began their working relationship in 1992 and the couple married in April 1995. They have five children: two daughters, Martha and David; seven grandchildren, David and Sally; and many grandchildren, Bob and Lisa. At the time Mrs. Stewart’s youngest son, Scott, became a member of the Board of Advisors when he had a diagnosis of dementia and, as a senior advisor, directed the committee on criminal justice reform that developed and then passed on his recommendation as the next chairman of the board of directors. The pair have had an extensive relationship. The couple has four children: one son, James Stewart; daughter, Elizabeth Stewart; three grandchildren, James and Marjorie; four great-grandchildren, Robert and Elizabeth Stewart; and one great-granddaughter, Sarah Stewart. In addition, Bill was raised in a family with a great-granddaughter-in-law who has had a few