Martha Stewart makes an unusual CEO pick
To shore up her crafting, baking and housewares business, she goes to. . . a scrap-metal expert?
Since 2003, Martha Stewart Living Omnimedia (MSO) has been run by half a dozen people, with experience variously in music, merchandising, advertising, management consulting and journalism. But until now the media and merchandising concern hadn't tried a scrap-metal expert.
That changed on Monday when the company chose as CEO Daniel Dienst, a metal-industry veteran who was most recently group chief executive of Sims Metal Management Ltd, which calls itself "North America's largest metals recycler," a position he had held since 2008.
A Martha Stewart board member since August, he succeeds Lisa Gersh, who stepped down last December after just five months on the job.
The new CEO couldn't come from a more different kind of industry. Sims Metal's website features a large black-and-white photo of giant claws hovering over piles of scrap. By comparison, the home page of Martha Stewart Living Omnimedia includes an elegant photo of a brisket bento box created by caterer Peter Callahan that features roasted vegetables, blue cheese, and dates.
But filling the CEO job was no easy task, highlighted by the 10-month delay in replacing Ms. Gersh. The company has suffered a revolving door of senior executives in the past decade, in at least some cases after clashes between management and Ms. Stewart, the namesake founder and nonexecutive chairman.
Meanwhile, it has lost money in all but one year of the past 10, as print advertising at its magazines dwindles and its TV business shrinks. More recently its merchandising business has been enmeshed in a legal battle with a longtime partner, Macy's (M).
Dienst, 48 years old, has turnaround experience from his days in the metals industry, say people who know him, as well as corporate finance experience from an earlier phase of his career on Wall Street. He is a "a no-nonsense smart manager," said Charles Koppelman, a former chairman of Martha Stewart Living Omnimedia.
The board, likewise, signaled that his outsider status was an asset, noting in a statement that "in his short time on the board Dan has brought a fresh perspective to the business."
Martha Stewart herself wasn't available for an interview but she noted in the same statement that Mr. Dienst has "specific expertise helping companies run efficiently and productively."
Koppelman said he expects Mr. Dienst will be able to work with Ms. Stewart while doing "all the things necessary to get the stock moving in a relatively short period. They didn't hire him to sell the company, but if he does all the right things this will be an attractive company for somebody to consider buying."
Even Wall Street seemed to approve. Martha Stewart stock rose by a penny to $2.40. "It wasn't what I was anticipating, not in the slightest," said Michael Kupinski, a media analyst with Noble Financial. "I was looking for somebody with more of a merchandising background. However, it makes sense to get a guy in there like this guy who knows how to deal with chaos."
—Joann S. Lublin contributed to this article.
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