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Martha Stewart Catalog for Living Is Dead

Martha Stewart Living Omnimedia Inc. will discontinue its catalog by year's end, the firm said yesterday, another victim of the company founder's clash with the law on charges related to insider trading.

The fate of Martha Stewart: The Catalog for Living is sealed almost two years after the book got a makeover and name change from Martha by Mail. The New York lifestyle merchandising and media company blamed Stewart's legal situation.

“We have recently taken strategic actions, including adjusting staffing levels in our television business to reflect that we have placed the 'Martha Stewart Living' program on hiatus for season 12 and taking steps to transition our Internet/direct commerce segment to focus primarily on the delivery of our … how-to information for the home through our Web site,” company president Sharon L. Patrick said in a statement.

“We are taking additional steps to continue to reduce losses in our Internet/direct commerce business and to ensure that we invest our resources in areas that offer the company its best return on investment,” she said. “Accordingly, by year-end 2004, we will eliminate our direct commerce business.”

However, the company will continue marthasflowers, its profitable direct-to-consumer business, and the content site at www.marthastewart.com. Along with how-to editorial, the site will drive subscriptions to magazines including Martha Stewart Living and Everyday Food.

Martha Stewart is exploring licensing and other alternative distribution opportunities for its products through its merchandising business.

The book's imminent demise is the latest in a catalog of miseries for a company whose founder once epitomized a lifestyle of idyllic perfection. Stewart is appealing a sentence of five months in prison, five months of incarceration at home and two years' probation for charges involving her sale of ImClone Systems stock.

Stewart's troubles have cost hundreds of jobs at Martha Stewart Living Omnimedia, curtailed the TV programming agenda and forced a change in the board of directors' composition.

Moreover, advertisers have grown skittish to associate with what is perceived as a tainted Martha Stewart brand. And the unrelenting media coverage cost goodwill, eventually lowering sales for the catalog and e-commerce division.

Second-quarter 2004 revenue for the Internet/direct commerce unit fell almost 18 percent to $6.4 million from $7.8 million in the year-ago period. However, loss for this year's second quarter was $2.4 million versus last year's $4.6 million. Growing sales of marthasflowers was the saving grace.

“The lower commerce revenue was principally due to lower catalog circulation,” an earnings statement said.

According to the list manager for Martha Stewart Living Omnimedia properties, Millard Group Inc., Peterborough, NH, the catalog has 183,000 12-month buyers.

The Martha Stewart Living magazine list has 1 million active paid subscribers, and Everyday Food has 339,000 active paid subscribers. Martha Stewart Weddings has more than 17,000 active paid subscribers.

In a release sent a day before Martha Stewart's latest statement, Millard announced “a new fundraising and membership base rate across all the Martha Stewart lists properties — $70 per thousand base rate and no select fees. This rate will take effect immediately for test and continuation mailers and will be available moving forward.”

In other words, Martha Stewart lists now are available at a nonprofit rate.

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