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The Comeback That Wasn’t

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Analysts and sources knowledgeable about MSLO suggest a range of possible outcomes. In one, the company goes private, freeing it from the burdensome costs, responsibilities, and scrutiny of being a public corporation. This scenario, according to a source close to Stewart’s camp, is the one favored by Stewart: It would allow her to partially cash out while giving her more control of her company. According to another source, Blackstone has been engaged for the dual purpose of first positioning the company for sale—by signing up for a number of new licensing deals—and only then selling it. The great new hope at the company is Gersh, a sharp-elbowed television executive who is expected to ascend to CEO. That ascension drew suddenly nearer when it was announced last week that Koppelman will step down from his executive position by December, a year earlier than his contract had provided. Yet if Gersh has been hired to make some of the tough cost cuts Stewart has long resisted, it’s an open question how long she will remain in Stewart’s good graces once she tells her that she needs to cut the budget of, say, Martha Stewart Living, by 30 percent.

Because of Stewart’s propensity to hold so tightly to her brand and empire and prerogatives, she now faces an unenviable conundrum: She must be torn between her reluctance to give up power and her desire for her company—and name—to outlast her. Were she only to fade gracefully into an emeritus role, she might sit back and watch her stock rise. But that would require that she get out of her own way.


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