Just six months after getting a promotion from COO to CEO, Martha Stewart Living Omnimedia CEO Lisa Gersh is going to step down in the next week or so, the New York Post and Wall Street Journal reported this week.
We've just spoken to a source briefed on the situation .
This source believes Gersh – MSLO shareholders – are getting a raw deal.
This source says Gersh's departure is a great shame, who gave the following reasons:
- MSLO is finally profiting because of a merchandising deal it struck with JC Penney. Gersh was instrumental in the deal. She got it done because JC Penney board member Gerry Laybourne is a former colleague. They cofounded Oxygen together. JCP not only did the deal, it also invested in MSLO. (This source concedes that the JC Penney deal did have one unfortunate side-effect: a nasty lawsuit with Macy's, which claims MSLO breached a contract.)
- Gersh was investing heavily in MSLO's online business, and has digital video revenues up to $20 million per year.
- Gersh hired MSLO's successful head of sales, Joe Lagana.
- Gersh had re-focused the company around its biggest magazine titles, Martha Stewart Living and Martha Stewart Weddings.
Make no mistake, Gersh is gone on Martha Stewart's orders. She owns ~70% of the company's controlling stock and she runs the board, which hires the CEO.
A source close to MSLO tells us Gersh got moved out because her JC Penney deal was so successful, that the company is now going to focus more on merchandising than it does media, which is Gersh's specialty.
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