Martha Stewart: The Rise of the Phoenix?


Code :ENT0017B

Year :

Industry :Personal Care Products

Region : USA

Teaching Note:Not Available

Structured Assignment :Not Available

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Martha: The Entrepreneur
Martha Stewart was a perfect example of a typical rags-to-riches story. She was born as Martha Helen Kostyra on August 3, 1941 in a large Polish family. Family celebrations, preparations for the family gatherings and strong work ethics were traits that Martha picked up from the family. She picked up culinary skills from her mother while her father taught her gardening. She learned about baking pies and cakes from her neighbors who were retired bakers. This experience from an early age turned into a passion for cooking and gardening...

The Decline
In 2002, investigations began into Martha’s involvement in the insider trading15, for selling 3,928 shares of ImClone Systems on December 27, 2001. After the FDA’s decision on December 28, 2001, the stock price of Imclone plunged by 70%, the same month. It was alleged that Martha sold the shares after receiving information from her broker that a cancer drug, Erbitux of the company would not be reviewed by the Food and Drug Association (FDA)16. It was also alleged that Martha had benefited from this information by avoiding a loss of $45,673. Martha resigned as CEO and Chairman of MSLO in June 2003....

The Two Faces of the Coin
The general public in America admired Martha for displaying courage in the face of adversity. In February 2005, the CEO of MSLO, Susan Lyne conducted a study on the ‘Martha’ brand. Nearly half the women surveyed considered themselves as supporters of Martha. Lyne said that the research confirmed her belief that the ‘Martha Stewart’ brand and Martha herself were the most valuable assets for the company...

Martha’s Comeback
The plans for Martha’s comeback, which began days before her imprisonment, were finalized by masters in their respective fields. Martha’s friend and private banker at Bank of America, Jane Heller arranged for Martha to meet Charles A. Koppelman, the former head of EMI Records, North America. Koppelman, who had worked with famous singers like Frank Sinatra, Billy Joel, and Barbara Streisand, was a freelance advisor for celebrities like Michael Jackson. In 2004, Martha included Koppelman on the board of MSLO....

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