|The new magazine from Martha Stewart Living Omnimedia.
MARTHA STEWART INDICTED; RESIGNS CEO-CHAIRMAN POSTS
Charged with Securities Fraud and Obstruction of Justice; Broker Indicted Too
MARTHA STEWART TESTS NEW MAGAZINE
But 'Everyday Food' Downplays Connection
MARTHA STEWART PROBE DRAINS OMNIMEDIA
Ongoing Investigation Cited in 67% Earnings Drop
EARNINGS AT MARTHA STEWART'S OMNIMEDIA PLUMMET 42%
Impact of Stock Trading Scandal Cited
SEC TO FILE FRAUD CHARGES AGAINST MARTHA STEWART
Report Says Lawyers Notified of Pending Action Over Stock Sale
Four test issues
The announcement follows a four-issue test run that began in January. The company declined to divulge sales figures for those test editions, which were distributed via newsstand and subscriber mailings.
Meanwhile, some new advertisers, like Reynolds Wrap and winery Forest Glen, have bought into the new publication.
Everyday Food will be published 10 times next year, with the company distributing 900,000 copies of the September issue. Lauren Stanich, who is overseeing the magazine as its president of publishing, said the landscape of titles sharing some characteristics with Everyday Food could point to a potential circulation of 4 million.
The company took out trademarks on many variations of "Everyday Food By Martha Stewart" in October 2001 for a range of retail products. It also trademarked the phrase without Ms. Stewart's name, but CEO Sharon Patrick said such moves were made to block potential interlopers and deflected the notion the company may want to further divorce the brand from Ms. Stewart.
In keeping with the minimized-Martha theme, this fall the new magazine will be joined by the launch of a syndicated TV show, "Petkeeping with Marc Morrone," which will be Omnimedia's first TV property not built around Ms. Stewart.
Indictment and plea
The launches come three weeks after Ms. Stewart was indicted and stepped down from her role as chairman and CEO of the company. She pled not guilty to charges that included securities fraud and obstruction of justice on June 4. The charges resulted from a lengthy investigation into her sale of ImCloneSystems stock in late 2001.
Ms. Stewart, who retains the role of chief creative officer, said she could not comment on her case. Her company has been severely impacted by the whirlwind of controversy set loose by the insider-trading allegations.
In a recent company filing with the Securities and Exchange Commission, Omnimedia said legal woes accounted for a range of business ills, including weakened direct-mail response rates and issues with distribution of Martha-branded furniture.
Falling newsstand sales
Newsstand sales at the 2.3-million circulation Martha Stewart Living fell 21.8% in the last half of 2002, and its ad pages are down 28.0% for the first five months of 2003. Its stock closed yesterday at $9.28, well off its 52-week high of $15. And Ms. Stewart's trial is set for Jan. 12 -- meaning the company must muddle through months of uncertainty.
Asked if there was further advertiser fallout resulting from this month's news, Suzanne Sobel, the company's executive vice president of ad sales and publisher of Martha Stewart Living, said that "things are basically the same." She cited public disclosure rules when asked how upcoming issues' ad sales were trending, and later contended that the title had already absorbed the marketplace's hit.
Cornmeal coating and raspberry sauce
As essentially a guide to getting the day's dinner on the table, the Everyday Food's premise may have broader potential than the studies in rarefied elegance one finds in the company's other publications. The tips on Everyday Food's pages are aggressively simple: A cornmeal coating also works well on chicken cutlets. Squeeze raspberry seeds against a sieve to extract the most liquid for a sauce.
"For us, it's positioned at the base of our retail pyramid," said Ms. Stewart, meaning its appeal was mass-market, like the company's Everyday line of home products at Kmart. "There's a very big customer base the magazine could appeal to."
Its subject and digest-size -- think TV Guide -- seem tailor-made for supermarket checkout racks, and perhaps a more newsstand-sale driven model than other company magazines.