She has homes in Maine, Manhattan, East Hampton and Bedford
Highs: Martha has become an iconic brand name which households all over America are familiar with.
At one time anything the homemaker – who turns 70 this week – touched, turned to gold
By Rachel Quigley
Her brand and image at one time seemed unstoppable and everything she touched turned to gold.
But a spell in prison, in-house disputes, bad decision making, the recession and the emergence of younger, leaner rivals has seen the Martha Stewart brand suffer a huge fall from grace. Not that you would know by looking at the celebrity homemaker-turned-former prison inmate.
An aerial view of her Bedford estate, which also has barns for Stewart’s horses
According to sources close to Ms Stewart, she allegedly insists on having nine personal assistants and expenses almost everything in her life – due in part to the fact that it is never clear where Martha Stewart the person ends and Martha Stewart the brand begins.
According to New York Magazine, her expenses have long been a sticking point between her and her CFOs, because everything she does or buys in her personal life can be used for her TV show or magazine or even be used in a tweet.
Between her farm in Bedford, her home in Maine, a house in East Hampton, and an apartment on Fifth Avenue, Ms Stewart is said to have steep personal bills to pay.
But it is alleged she expenses an extraordinary amount of them, including use of a driver, personal trainer and home security system.
And with Ms Stewart – who turns 70 this week – due to return to the board of directors of Martha Stewart Living Omnimedia this fall when her five-year ban comes to an end, it is not likely that these extravagances will be curbed.
A former executive also claims that despite the fact MSLO is losing money daily, she still insists on keeping ‘nine personal assistants’. The executive told NY magazine: ‘Nine. That number is untouchable. I broached it with her and I almost lost my job that day.’ She is also said to keep three separate test kitchens and think nothing of sending employees to far-off places like India, just to buy a certain piece of fabric.
Lows: Martha Stewart leaves Manhattan Federal Court after she was sentenced to five months in prison
and two years probation for lying to investigators about her sale of ImClone Systems stock in 2002
Ms Stewart – whose net worth is believed to be $638 million – served five months in prison in 2004 for lying to investigators in an insider-trading case. She began a comeback campaign in 2005 and her company returned to profit in 2006.
But the recession hit her company hard and the MSLO share price remains around the $4 mark – $4.18 at time of writing – when in its hey day it was as high as $36.
It sunk to its lowest in 2009 at a mere $1.73.
MSLO has been profitable in only one of the past eight years – losing a whopping $185million on the way.
According to New York Magazine, in the fourth quarter of last year, on the verge of violating loan covenants, the company had to renegotiate its debt with Bank of America.
Her television programme on Hallmark has been cut from eight hours to five and the brand has struggled to replace the revenue it used to enjoy through its licensing partnership with Kmart.
CEO Charles Koppleman is due to leave by the year’s end after enjoying a tumultuous business relationship with Ms Stewart. He was at one time seen as her saviour but is now being held by some as being responsible for the demise of the Martha Stewart brand.
But his exit from the company will be cushioned by a very generous exit package, which includes a $1.47 million severance payment and up to $35,000 for the attorneys who worked on his new arrangement, according to Deadline New York.
The filing says he’ll remain on the MSLO board as ‘Non-Executive Chairman, Vice Chairman or Special Committee Chairman’. That will entitle him to an initial $50,000 in stock rights as well as rights to 100,000 shares.
But despite this, and for a man who in 2008 commanded $8million in compensation from MSLO, his gift registry at Williams-Sonoma does not reflect his vast fortune.
In his up-coming wedding with Gerri Kyhill, who runs the New York outlet of the pole-dancing exercise chain S Factor, they request gifts including a $45 cutting board and $49 hotel napkins.
In 2008, MSLO’s human-resources department sent an e-mail to employees offering pole-dancing classes at S Factor as a company-paid benefit.
Ms Kyhill and S Factor’s founder, Sheila Kelley, also led Ms Stewart through a now-infamous pole-dancing routine on her television show.
Mr Koppelman’s daughter Jennifer Koppelman Hutt is co-host of Whatever, Martha! with Ms Stewart’s daughter Alexis. Last year she was paid $350,000 while Alexis made $400,000.
With Ms Stewart poised to go back on the board of directors in the Fall and with Mr Koppelman playing a less hands-on role, it remains to be seen if she can salvage what is left of the much-loved brand, despite having younger and leaner rivals snapping at her heels.
Former executives believe that no matter what happens to the company, the 69-year-old cannot help but feel that she deserves to be paid well, with one attributing her obsession with compensation to her humble origins: ‘I think she still has the fear that she will end up with nothing.’
This was the billionaire, after all, who had risked everything over a $51,000 stock trade.
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