Small Business

Martha Stewart on how to stitch a time-tested brand

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She’s one of the world’s most recognisable brands; queen of the home; America’s lifestyle authority on everything and anything. She is Martha Stewart and, though her name now umbrellas an empire of magazines, TV shows and products and her net worth exceeds US$600 million, she once started her business like many other entrepreneurs – at the kitchen table.

A look at the figures is all it takes to realise how large a brand this actually is: the company has published more than 475 magazine issues, more than 70 books, around 20 different product lines with partners including Macy’s, Home Depot and Staples, more than 4250 episodes of award-winning television, and more than six million unique visitors every month to the company’s four websites and 15 blogs.

From stockbroker to homemaker mogul

To understand how this homemaker mogul became a household name, one has to track back to her early days, fresh out of college and with big dreams of taking on New York City.

Speaking at Growth Faculty’s Global Leadership Forum in December, she said, “It was the cusp of women leaving home and getting exiting jobs.

“It never occurred to me to stay home,” she said. “I was always going to get a job.”

Working as a stockbroker on Wall Street in the 60s, Stewart quickly found success working with big clients such as the Rockefeller Brothers Fund.

“I liked Wall Street a lot but it was also in transition. In the early 70s, commissions were being regulated and cut in half and I decided I wasn’t going to make as much money unless I went into management.”

Instead, Stewart turned to her area of interest – the home – to see whether she could cultivate a career out of it.

“I really liked the idea of starting a business centred around the home,” she said. “My daughter was about six years old at the time and we were restoring an old farmhouse.”

In 1976, Stewart decided to make the change and started a catering business. This was no ordinary kitchen table business though. Stewart catered for big clients including the likes of Sotheby’s in New York and the Smithsonian Cooper-Hewitt National Design Museum.

“I built the business in just a few years to more than a million dollars revenue which was a lot for a caterer in those days working out of the basement kitchen and building a party every single night. It was like building a restaurant.”

From there, Stewart released her first book Entertaining in 1982, which her publisher said would be a success if it managed to move 20,000 copies. The book sold millions, making Stewart the best-selling cookbook author since Julia Child.

“It struck a chord, that book. People responded, housewives everywhere responded to the message in that book which was actually you can balance career, family, entertaining, a beautiful lifestyle, and you can work it all in if you try really hard.”

The book made Stewart a raging success and she continued to write one a year. However, by 1990, she realised books weren’t enough to encompass all the topics she was interested in.

“I wanted to take all the subjects related to the home – everything from gardening, cleaning and cooking, collecting and holidays and children and pets – all those subjects that are so absolutely essential to understand for the homemaker. And I thought, by god, the only format that I could possibly create … was a magazine.”

In 1990, Time Publishing Ventures (now Time Inc.) launched Martha Stewart Living with Stewart acting as editor-in-chief.

“We have a base of subscribers of 2.3 million for that magazine and that has never faltered. It’s been a very, very strong and well-liked magazine for 20 years.”

Covering all bases

From print to the silver screen, Stewart moved to television in 1993.

“It was a groundbreaking idea,” said Stewart. “We were part of Time Inc. and they were actually concerned that having a television show would siphon readers away from the magazine. It turned out, of course, to be completely the opposite.

So what was Stewart doing differently? What made her brand soar sky-high? “It was a word that was not well-liked in the early 90s and that was synergy. Time Warner was my partner and didn’t like my approach at synergistic TV, magazine, books, products. They said, ‘Oh, it will never work, one is going to cannibalise the other’.”

But it did work and the brand forged a new multibillion-dollar industry – the lifestyle industry.

The key, she says, is to understand the customer – what they want and where they want to get it.

“Two words – need and want – have really been the keywords in the building of my company. What does the customer want and what does the customer need?” she asked. “Inspiration and information. Inspiration and product. It’s those things constantly. I’m constantly reviewing what we’re making and what we’re doing and what we’re saying. Is it really what we need and want? And that has really stood me in great stead because it’s worked.”

Understanding the customer has never been more important, particularly in an age where consumers are forgoing the traditional retail model.

“We have to rethink how people want to access merchandise, how they want to spend their time shopping. Are they only going to go online or are they also going to go into a new style environment and learn how to enjoy themselves shopping?”

Martha Stewart recently signed a deal with JC Penny. The new CEO Ron Johnson – the man behind the design of the Apple Store with its Genius Bar – plans to develop a new retail paradigm.

“This is a very exciting step for me because we will be working very closely with Ron and his team to help innovate department stores.

It’s also essential to listen, she says. Listen and then give the masses what they want. For example, in the early 90s when Stewart’s company partnered with K-Mart to sell manchester, Stewart asked why they weren’t selling any pale greens, pinks and yellows.

“They said, ‘Poor people want dark sheets they don’t have to wash so often’. I said, ‘Are you crazy?’ Obviously they weren’t listening to the customer.”

Martha Stewart’s pastel-coloured manchester range went on to sell billions of dollars.

“Never ever talk down to a customer. Always listen to a customer,” she said. “Rule number one, the customer is always right. Rule number two, if the customer is wrong, go back to rule number one. I totally believe that.”

Trying times and second chances

Of course, Martha Stewart’s story isn’t all success and champagne.

In 1997, Stewart took control of her empire, buying her magazine from Time Inc. and incorporating it all under Martha Stewart Omnimedia. But things took a turn in 2001 when Stewart was charged with securities fraud and spent five months in a federal prison in West Virginia in 2005.

“It could have been devastating and yet because I believed in myself, my friends and family believed in me and my company believed in me, I survived it, came out of it and actually was able to rebuild the company.”

Having built a strong business, Stewart was then forced to rebuild it.

“Building a company is so much fun. Rebuilding a company after something like that is not so much fun. But perseverance is very important and belief in the people around you,” she said. “What I didn’t lose was my self-respect and I did not lose my company and I did not lose the jobs of all my employees.

“You don’t give up because you’ve fallen into a hole. No, you fall out.”

In 2005, after serving her time, she returned to the office, rallied her staff and said, ‘We are all of us in this next chapter going for greatness’.

“They stood by me and waited for me to come back,” she said. “Everyone needs encouragement, everyone needs to believe in what they’re doing – that’s it’s good, that it’s productive, that it’s valuable, that it’s trustworthy – and that never left. Thank heavens, it never left.”

Stewart says these trials and tribulations damaged the business, but not the brand, such was its strength.

“More people are aware of that brand than a lot of other brands. We have a hugely popular brand and the brand is much, much bigger than the business. Now we have to grow into the brand. So we’re actually in an admirable position to have such a strong brand. One of the most difficult things in the world is to build is a strong, trustworthy brand and we have that. Now we are building the business to meet that brand.”

Summing up her career, Stewart says, “I’m very proud of the influence that I and my company had on the American public and elsewhere. We have certainly elevated the art of the homemaker to an art form rather than a drudgery.”

And though 70 years of age, she has no plans to retire with her millions.

“I hope I never have to retire. I don’t have to because I still own the controlling shares of the company. I don’t have to leave. But I am encouraging the growth of this company. I’m encouraging other people to come forth with their great ideas, their great designs, their own brands.”

Stewart hopes her brand can outlive her, “like Chanel which has way outlasted Madame Chanel, like Estee Lauder, look how strong that company is, like Ralph Lauren, Calvin Klein”.

“There are very strong brands, well-known, that have positioned themselves as I hope our company will, to completely outlive the founder.”

If you’re looking to work on your business rather than being stuck in it, book in for a complimentary business assessment today with Switzer Business Coaching.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Published on: Friday, February 10, 2012

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