Martha Stewart's Company Sold For A Fraction Of Its Previous Worth
LINDA WERTHEIMER, HOST:
Martha Stewart, the domestic goddess's domestic goddess, has fallen on relatively hard times. Her business is being sold for a fraction of the billions it was once worth. She's had legal problems. A decade ago, she went to prison for conspiracy and lying to federal investigators. More recently, a court had to sort out the overlap in her licensing agreements with Macy's and Penneys. But brand analyst Liz Dunn says all this does not fully explain what happened to the Martha Stewart brand.
LIZ DUNN: I think what was a bigger challenge was that she maybe took her eye off the ball in terms of what was happening in the industry and what was happening with digital.
WERTHEIMER: Things like blogs and other source of - digital shopping, all that kind of thing, you think she just missed the boat there.
DUNN: I do. I mean, I think it would've been a challenge for her, even if she was keeping pace with the rate of change because you'd just have more competition, but also Martha Stewart's brand was feeling a little bit stale. I think that the world of bloggers and all that's happened with digital content out there would've been a challenge under any scenario, but I think the short story is Martha didn't adapt and the entire rest of the world did.
WERTHEIMER: So who do you think is the competition that seems to have passed Martha Stewart?
DUNN: Well, I think it's coming from many different directions. Etsy is certainly a major influence out there with the do-it-yourself movement with handcrafted goods. I think that there are style bloggers that are certainly huge; women like Song of Style. There are celebrity upstarts; Gwyneth Paltrow with her website Goop. And I think the consumer's looking to all of these things to say how do I accomplish the style in my life in maybe a little bit more of a curated way instead of buying everything hook, line and sinker from one source?
WERTHEIMER: If Martha Stewart were to call you up, Liz Dunn, and hire you to give her some brand advice for what's going to happen next, what would you tell her?
DUNN: It would be really a two-step process. I think there's a very large analytical exercise to happen around all of her products to figure out where should the company be investing their time and where should they maybe pull back some resources? You know, do we really need to have a Martha Stewart hot sauce? Is that something that's really out there making money or is it just a distraction?
I think the second thing is elevating Martha Stewart to resume her place as a style icon, but in a very digital way with a heavy presence of social media. If she were to go a little bit deeper into Pinterest and Instagram and Facebook, perhaps create more of a curated website where she was really delivering the same sort of style advice, but in a fresher, kind of new way and let the business minds that have acquired her company worry about the analytical exercise.
WERTHEIMER: Brand analyst and consultant Liz Dunn, she is the head of Talmage Advisors. Thank you.
DUNN: Thank you for having me.
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