Dec. 19 (Bloomberg) -- Martha Stewart Living Omnimedia Inc., the company founded by home-decor guru Martha Stewart, said Chief Executive Officer Lisa Gersh will step down, part of an effort to bolster its merchandising business.
A search is under way for a successor, the New York-based company said today in a statement. Gersh, who was only named to the CEO job five months ago, will retain the position during the transition period.
After sluggish advertising sales in its media business contributed to four straight years of losses and declining revenue, Martha Stewart Living is focusing more on selling merchandise through retailers. The company entered an agreement in late 2011 with J.C. Penney Co., a deal that will start boosting revenue by early 2013, according to the statement.
- NOTE: Sales have been falling at MSO for four straight years. The company laid off 10 percent of its 600-person workforce a few weeks ago. See "Martha Stewart's Empire Collapses."
“We are now increasing our capabilities in merchandising and plan to take full advantage of that opportunity for the benefit of our shareholders,” Stewart, who serves as non- executive chairman, said in the statement.
The company said earlier this year that it would shut down its Whole Living magazine and turn its Everyday Food title into an online publication. It’s also cutting jobs as part of a plan to save $45 million to $47 million annually. In addition to the print changes, Martha Stewart Living is revamping its broadcast division to focus more on Internet services, including AOL Inc. and Hulu LLC.
The shares fell 5 percent to $2.45 at 9:55 a.m. in New York. The stock had tumbled 41 percent this year through yesterday.
Fourth-quarter merchandising revenue is expected to 15 percent higher than a year earlier, the company said. That business brings adjusted profit margins of about 70 percent, excluding interest, taxes, depreciation and amortization, Martha Stewart Living said.
--With assistance from Sarah Frier in New York. Editors: Nick Turner, James Callan
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