"Brand CEOs": The Case of Martha Stewart
"I am an individual, but I'm a business; Martha Stewart the individual has become Martha Stewart the brand."1
– Martha Stewart
"Her tabloid celebrity, her status as a walking talking brand name, and her role as CEO of a publicly held corporation turned whatwould otherwise have been a simple case into a treacherous web of legal and corporate issues."2Introduction
Ms Perfectionist", "Domestic doyenne" and a rolemodel for any businesswoman, is the 'second' most written about woman3 in the world. This well-known entrepreneur of the United States, who turned the art of home-making and keeping into a billion dollar business - Martha Stewart Living Omnimedia Inc (MSO), encountered hard times when she was convicted in a scandal. She was convicted for her actions, which are considered to be less harmful in a corporate world that witnessed more serious scandals. Her case called for a rethinking of certain basic notions in free-market economies - ethics in business, the role of government regulation, and more importantly the perils and promises of personal branding.
The Making of MSO
Coming fromhumble moorings,Martha Stewart owed her culinary and gardening skills to her parentage in a working-class family in NewJersey in the 1940s and 1950s. She was one of the first few women who entered theWall Street in 1968 as a stockbroker with the New York Stock Exchange. She took to catering business in the 1970s, and honed her skills in keeping kitchen, arranging parties, designing interiors - the 'Martha Stewart way'. She made her way into publishing with her first book, Entertaining in 1982, and produced a variety of books, videotapes, CDs, and television specials.Martha launched her renowned magazine,Martha Stewart Living in collaborationwithTimeWarner, in 1990, and a television series by the same name, in 1993. Her regular appearance on televisionmade her a household name in the US. TheMSO expanded when it went public on the NewYork Stock Exchange in 1999. The enormous edifice of the company stood on four business segments – Publishing, Television,Merchandising, and Internet/Direct Commerce, with eight core content areas – Home, Cooking and Entertaining, Gardening, Crafts, Holiday,Weddings, Pet Keeping, and Baby and Kids. At 62, Martha states, "I am an individual, but I'm a business; Martha Stewart the individual has becomeMartha Stewart the brand."4 But, it appeared as though all her perfection was not infallible when, perhaps in her bid to 'just have more'5 , Martha went 'penny wise'.
The ImClone Scandal: Martha, Penny Wise...?
Martha Stewart, who made history for the "good things" she showed the world, was in the news in June 2003 perhaps the first time for the wrong reason. She quit as chairman and CEO of the company she founded, when she was indicted on the charges of securities fraud, obstructing justice, conspiracy, and lying. She was accused of insider trading6 for selling her shares of ImClone - a biotech company, after being allegedly tipped of a stock sale by her friend SamuelWaksal, the chief executive and chairman of ImClone.OnDecember 27th 2001,Martha sold 3,928 shares for $225,000, thereby avoiding a loss of around $51,000 when the stock tumbled the next trading day following FDA's disapproval of ImClone's cancer drug, Erbitux.Next >>
1]"Why Do People Hate Martha", www.cbsnews.com, March 5th 2004
2]Daniel Kadlec, "Not a Good Thing for Martha", www.time.com/time/magazine, March 15th 2004
3]David Walsh, "On the rise and fall of Martha Stewart", www.wsws.org/articles/2004, March 12th 2004
4]Why Do People Hate Martha?", op.cit.
6]Illegal insider trading refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, confidential information about the security. Insider trading violations include "tipping" such information, securities trading by the person "tipped" and securities trading by those who misuse such information.