Martha Stewart’s Bad PR Continues with Holiday Layoffs

 Martha Stewarts Bad PR Continues with Holiday Layoffs

THE PR VERDICT: “D” (PR Problematic) for Martha Stewart Omnimedia

An unwritten rule in publishing used to be no layoffs between November and January. No company wanted to appear either heartless or desperate and ruin employees’ holidays. But just as print gives way to digital, so the old rules are broken in favor of the first law of business: survival of the fittest. And so last Thursday, Martha Stewart Omnimedia terminated 100 employees, roughly a quarter of its staff, two weeks before Christmas.

The move itself isn’t that big a surprise for a company that has been losing money steadily in recent years. Ad pages in MSO magazines are down, and the company ceased publication of two titles, Everyday Food and Whole Living, earlier this year. Television productions have also lost revenue.

While the terminations may save some money, the timing of them does nothing to stanch the flow of negative publicity for MSO including the recent court case with Macy’s. Now come terminations at the behest of new MSO CEO Daniel Dienst, described as a “veteran turnaround expert” by the Wall Street Journal. Stewart released the quote, “Dan has specific expertise helping companies run efficiently and productively.” This season Martha’s holiday cheer gives rise to nothing but scorn for the 100 employees whose got a gift wrapped pink slip for Christmas.

PR VERDICT: “D” (PR Problematic) for Martha Stewart Omnimedia.

THE PR TAKEAWAY: Appearances can be aggrieving. When taking a company’s bottom line into consideration, factor in customer reaction. Martha Stewart caters to female consumers – specifically, homemakers. Really specifically, women who wouldn’t want their joyous holidays turned lean after being fired by a Scrooge. The timing for this could not have been worse. Tough decisions need to be made, no doubt, but timing in cases like this really is everything.

More Trouble for Martha Stewart: Not a “Good Thing”

 More Trouble for Martha Stewart: Not a Good Thing

The PR Verdict: “D” (PR Problematic) for Martha Stewart and J.C. Penney.

Martha Stewart has had more than her share of embarrassing public moments lately. Two of her offshoot magazines had to be co-opted into her regular publication, Martha Stewart Living, due to poor newsstand sales. And yesterday, the head of Macy’s department stores, Terry Lundgren said that Martha made him “sick.”

The cause of Macy’s CEO upset wasn’t Martha’s recipe for dinner, but rather her recipe for success. Stewart allegedly phoned Lungdren in December 2011 to tell the CEO that she’d inked a merchandising deal with rival retailer J.C. Penney. This took Macy’s by surprise. Lundgren thought their deal, struck in 2007, to sell Martha Stewart cookware, bedding, and other products was exclusive. “I was completely shocked and blown away,” Lundgren testified at a court hearing this week,  “I was literally sick to my stomach.” He further testified that Stewart claimed in their phone call that the deal with JC Penney would be good for Macy’s. At that point Lundgren hung up on Stewart.

JC Penney claims the deal was vital to their rebranding and vital to Martha, who also sold them 17 percent of her company. But the legal question and PR problem is how did Martha think she might get away with the deal to sell her home products through a department store, when she already had a deal to do just that.

THE PR VERDICT: “D” (PR Problematic) for Martha Stewart, and for J.C. Penney; Macy’s has now won a court injunction to temporarily block Penney’s from selling Martha Stewart products.

THE PR TAKEAWAY: Business is cutthroat, but reputations can be preserved by being above board. Sure, everyone loves a dramatic under-the-table deal – in the movies. But in real life the dealmaker comes off as untrustworthy and from the PR standpoint, desperate. Stewart already had publicly-known problems with her corporation; JC Penney’s flagging sales have led to a massive and risky revamp of their stores. Each party needed the other, and each had to know that Macy’s wouldn’t take this lying down, not even on 400 thread-count percale sheets in Blossom Yellow. The repercussions will illustrate yet again that there is such a thing as bad publicity.

Martha Stewart Cooks Up a New Image

 Martha Stewart Cooks Up a New Image

The PR Verdict: “A” (Gold Star!) for Martha Stewart.

Martha Stewart was very busy over the Thanksgiving – and not just cooking up a feast. The guru of home entertaining was featured in both The New York Times and The Financial Times. Both  articles were presumably designed to calm investor nerves about her company, Martha Stewart Living Omnimedia, which recently announced layoffs and financial losses.

The NYT glowingly described Martha as the new “patron saint” of the hipster entrepreneurial class while the FT gave Ms. Stewart multiple opportunities to talk about planned and current business initiatives (good for the stock price). And neither failed to mention her time in the clink.

Martha gave the FT passing acknowledgment of her prison sentence for lying to prosecutors about a stock sale, while the NYT asked her fan base for its opinion. Luckily, the responses were consistently positive. One fan, who referred to Martha as “The Jesus of the craft world,” said, “I heard that she just took some bad advice. Anybody can make mistakes.” Martha, from what she told the FT, takes a similar view.

The PR Verdict: “A” (Gold Star!) to Martha Stewart for putting a tough period behind her. It’s even given her street cred!

The PR Takeaway: Set the tone, and others will follow. While prison time might have theoretically ruined the image of the perfect homemaker, Martha Stewart has been able to successfully move on. Parting with the traditional PR strategy of public atonement, Martha instead describes her prison time as “a hole I fell into; luckily it wasn’t a very deep hole,” while adding that the experience didn’t teach her much. From the outset she has been unrepentant, and now her new followers are taking the same line of indifference. In the age of labored public apologies, this is one strategy that  is breaking the mold. And Martha’s expanded fan base seems to like it.

Click here for Martha’s FT interview and New York TImes feature.

What’s your opinion of Martha Stewart’s strategy? Give us your PR Verdict!