Gianni Versace, Coco Chanel, Martha Stewart.  Which is the odd one out?

All three built hugely successful brands associated with quality and style.  However, while Versace and Chanel sold their products – usually by using beautiful models – Martha Stewart sold a lifestyle and put herself at the very centre of it.  Books, magazines and TV programmes made her a household name in the USA, offering advice to the American public on how to eat, dress, garden and decorate their homes.

However, it is the very fact that Martha Stewart’s profile is such an integral part of the brand that may spell disaster for Martha Stewart Living Omnimedia - the company she founded.

In March 2004, Stewart was found guilty of lying to investigators over a suspicious sale of shares in a drug company.  It is alleged that Stewart used insider knowledge to profit on the share deal.  Living Omnimedia, a company with revenues of $295 million in 2002 was immediately plunged into crisis.  TV appearances focussed on a possible prison sentence rather than the domestic advice that had made Stewart famous.

Stewart resigned from her position as chief executive when the charges against her were first made public, although she retained a seat on the board.  At the same time, the company began to produce magazines and TV shows that no longer used Stewart’s name.

Despite these efforts to rebuild, many experts feel that too much damage has been done to the Martha Stewart brand, especially in the face of increasing competition.  Arthur Kincaid, a leading customer research analyst, described it as ‘a perfect example of how fragile brands are when they are very closely associated with a human being.  Any sudden change in the public perception of the ‘human brand’ can have an immediate and devastating effect on profitability.’

The evidence supports this – when the Martha Stewart verdict was announced, shares in her company dropped by almost 23% and the forecast is for further losses, although  Living Omnimedia says it is confident that it will remain a leading brand in its field.

According to Arthur Kincaid, ‘A brand depends on the values of its customers and how it appeals to them.  Whatever image and lifestyle values this may include, the really important ones will always be things like ‘trust’ and ‘confidence’.  When they disappear, it may be impossible for the brand to survive.