MSLO Nears Sale To Sequential Brands

Executives at Martha Stewart Living Omnimedia are close to finalizing a deal to sell the company to Sequential Brands Group, a retail licensing company. While an announcement is expected in the next few days, the terms of the potential transaction are not known, and it’s still possible the deal will be called off.

The Wall Street Journal, which cited people familiar with the negotiations, first reported the news.

If the deal does go through, it suggests MSLO’s business strategy may be poised to shift significantly, with less emphasis on publishing revenue streams from advertising and circulation and more emphasis on licensing deals leveraging Stewart’s still considerable brand recognition.

Such a move would also build on MSLO’s established expertise in licensing and merchandising deals, which have contributed a growing part of the company’s business over the last few years, although overall revenues have declined.

In 2014, merchandising revenues came to $15.9 million, contributing 38% of total revenues of $41.4 million. That compares to $11.6 million, or 16% of total revenues, in 2010.



However, not everything has gone swimmingly on the retail merchandising front. In 2011, MSLO and J.C. Penney unveiled a licensing and merchandising deal, calling for the creation of mini-stores carrying Martha Stewart-branded product lines in J.C. Penney stores. They were sued by Macy’s, which argued that their deal violated the terms of its own contract with MSLO. The lawsuit between Macy’s and MSLO was settled out of court in January 2014.

More recently, last October MSLO handed all non-editorial responsibilities for Martha Stewart Living, along with its sister publication Martha Stewart Weddings and their Web sites, to Meredith Corp. Under the terms of the 10-year licensing agreement, Stewart and her staff retain editorial control of the magazines, but Meredith leads all sales and marketing, circulation and production responsibilities for the brands and their related digital assets, including a large video library.

Over the last few years, MSLO also wound down its once substantial broadcast TV operations.

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