Martha Stewart Catalog to Close

As revenue at Martha Stewart Living Omnimedia (MSO) continues to tumble, the New York-based company announced on Aug. 3 that it would eliminate its catalog business by year’s end.

Second-quarter revenue from the direct commerce business, which includes Martha Stewart the Catalog for Living and the companion Website, fell 19%, to $6.3 million for the three months ended June 30, compared with $7.8 million last year. Total company revenue dropped 33%, to $44.0 million for the quarter, while revenue from its television business fell 54%, to $3.1 million.

MSO president/CEO Sharon Patrick said in a statement that the company wants to cut its direct marketing losses “to ensure that we invest our resources in areas that offer the company its best return on investment.”

The company blamed the declining direct sales on lower catalog circulation and the negative publicity surrounding its namesake. In March, Martha Stewart was convicted of lying to investigators about her sale of ImClone Systems stock; she was sentenced in July to five months in prison and five months of house arrest plus a $30,000 fine. Stewart’s woes have led to job cuts and lower sales at the company during the past 18 months; Stewart herself was forced to step down as chairman/CEO in June 2003.

Founded in 1997 as Martha by Mail, the catalog was redesigned two years ago. MSO will continue to operate its profitable direct-to-consumer floral business, MarthasFlowers.com, as well as retain its MarthaStewart.com Website as a source of editorial content and as a way to drive people to the company’s magazines, which include Martha Stewart Living and Everyday Food. In August, MSO paid $6 million cash for two more publications, Body & Soul magazine, published by New Age Publishing, and Dr. Weil’s Self Healing newsletter, published by Thorne Communications.

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Martha Stewart Catalog to Close

As revenue at Martha Stewart Living Omnimedia continues to tumble, the New York-based company plans to eliminate its catalog business by year’s end.

Second-quarter revenue from the direct commerce business, which includes catalog and Internet, fell 19%, to $6.3 million for the three months ended June 30, compared with $7.8 million last year. Martha Stewart Living president/CEO Sharon Patrick said in a statement that the company wants to cut its direct marketing losses “to ensure that we invest our resources in areas that offer the company its best return on investment.”

The company will continue to operate its profitable direct-to-consumer floral business, MarthasFlowers.com, as well as retain its MarthaStewart.com Website as a source of editorial content.

The company’s revenue shortfalls were not limited to its direct business. Total revenue dropped 33%, to $ 44.0 million for the quarter. Revenue from its television business fell 54%, to $3.1 million.

On July 16, Stewart was sentenced to five months in prison and two years’ probation for lying to investigators about her sale of ImClone Systems stock in late 2001. After her release, Stewart is to serve five months of home confinement and pay a $30,000 fine.

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