Someone's In The Kitchen With Martha
Martha Stewart is at a gala sipping a glass of turquoise champagne to match her cashmere jacket and costume jewelry when she turns to her new chief executive. "Doesn't this remind you of the blue skin of a scarab beetle, Sharon?" Sharon Patrick--her own beer-hued pantsuit clashing with the drink--chokes out a boisterous laugh. "Martha, how am I supposed to know what a scarab beetle looks like?"
Sharon Patrick can't distinguish between garden bugs. She doesn't bake breathtaking cakes, spin sugar, or raise her own chickens. But since they met four years ago climbing Mt. Kilimanjaro, the former McKinsey & Co. consultant and America's domestic doyenne have become so intertwined that they now share an office and work head-to-head at antique French postmaster's desks. "Martha fell in love with Sharon's mind," says Charlotte Beers, chairman emeritus of Ogilvy & Mather Worldwide Inc. and a mutual friend.
DIPLOMATIC TONGUE. What's not to love? This is the mind, after all, that in February pulled off the buyout of the prized Martha Stewart Living Enterprises from Time Inc., finally turning America's favorite hostess into a full-fledged corporate entity 15 years after she published her watershed book, Entertaining. For two years, Stewart had tried to take control of her signature magazine, books, and mail-order catalog. But it wasn't until Patrick came along with her diplomatic tongue and tough negotiating tactics that Time agreed to sell more than 80%, for roughly $75 million. "Sharon is great at bringing warring parties together," says Joseph Ripp, Time's chief financial officer. "Without Sharon, there would have been no deal."
And without the deal, there would be no Martha Stewart Living Omnimedia--an empire that sprawls over three floors of a landmark building in midtown Manhattan. There, 160 people create the recipes, gardening tips, and housekeeping advice that Stewart will preach to millions. Patrick's job is to spread the gospel over every mass-market medium. Until recently, Stewart's mainstay was the magazine that carries her message to 2.2 million people. But this year, Martha Stewart Living will generate only a quarter of some $200 million in sales. The rest will come from books, a television show, weekly appearances on CBS's This Morning, her catalog, and a mushrooming line of products. Stewart just signed a deal for her own daily radio show and by fall will hawk her wares at a pay-as-you-go Web site. Now, even top media analysts don't quibble with Patrick when she vows: "Martha Stewart is about to be the world's first true multimedia brand."
Patrick, a tall, blonde San Diego native who swam with the dolphins at Sea World before getting her Harvard MBA, has been yearning to place a brand in all media windows since the early 1980s, when she was a partner at McKinsey. "I always thought it was good economics and the wave of the future," she says. She never found the right client to test her philosophy, but Cablevision Systems Corp. Chief Executive Charles F. Dolan liked her so much that in 1990 he wooed Patrick to become president of his struggling programming arm, Rainbow Programming Holdings Inc. "She has a great power to analyze and organize," Dolan says. By bringing in new programs and eliminating stale ones, Patrick boosted revenues 50%, to $330 million. When her $325,000-a-year contract expired after three years, she left. "I'm a startup and a turnaround person," she says. "When a job's done, it's done."
So when will Patrick walk away from Martha Stewart? "This is an entrepreneurial business," Patrick says. "It will be developing for years and years. I'm here for the long haul." That surprises some acquaintances, given the duo's equally strong egos and divergent domestic bents. "I wondered if Sharon knew what she was getting into," says Jon Katzenbach, a McKinsey director. Patrick likes to garden on the sprawling terrace of her Upper East Side penthouse, but looks nervous when asked if housekeeping is her No.1 priority. "Of course," she gasps. "Isn't it yours?"
Like Stewart, Patrick seems to inspire either admiration or loathing--never indifference. Talk to her chums, and they'll say she's a brilliant businesswoman with a great sense of humor. Talk to some colleagues, though, and you may hear her described as a ruthless opportunist who schmoozes with the chief but alienates the rank and file. "Sharon doesn't suffer fools easily," Dolan says. Patrick bristles: "Sure I'm demanding. But so are Lou Gerstner and Lee Iacocca. If I were a man, I'd be called a great leader."
Patrick talks nonstop--until asked if she and Martha always agree. "There's a general agreement that the company must be profitable," she says simply. Apparently, Stewart's high-class tastes don't always translate smoothly to the mass market. When they were developing a line of 256 Sherwin-Williams paints last year, Stewart poured more than 2,000 mixtures, trying to match things around her house--from her cat's fur to chicken eggs. Some were too expensive to sell for $14.99 a gallon. "Sharon was able to ground most of the discussions in reality," says T. Scott King, president of the paint company's consumer-brands unit. "Martha's a creative person. Sharon figures out how to bring it to market."
But imply that Sharon is the business brains and Martha is the artist, and Stewart is quick to remind you that she was once a successful stockbroker. "Remember, I'm a businesswoman too," Stewart says. "These are all my ideas, and I set all the direction."
Lest there be any doubt about who's in charge, Stewart, who is chairman, recently reclaimed the chief executive title for herself--three months after heralding Patrick's appointment as CEO. Patrick is now president. "Martha isn't as consumed by TV as we thought she would be," Patrick explains. Stewart, calling from her car phone before an appearance with Jay Leno, says: "Titles. I'd prefer if we didn't have any."
Despite their differences, acquaintances say Stewart and Patrick are extremely close. They often spend weekends at Stewart's East Hampton home and travel the world mixing work with play. "Sharon is not easily daunted," Beers says. "They are very loyal to each other." The pair met four years ago hiking 19,340 feet up Mt. Kilimanjaro, in a trip arranged by the socialite Sandy Hill Pittman. Among Patrick's first memories: The high priestess of home decorating refused to wear the gear. "It was bright green, bright red, bright yellow," Patrick says. "Martha expected to look like Out of Africa. I didn't care what I wore. That's the difference between Martha and me."
Stewart switched to khaki gear and became so camouflaged that she got lost halfway up. When they regrouped, the women began talking about how to turn Martha Stewart's disparate initiatives into an all-encompassing brand. By late 1995, Patrick was practically living at Stewart's Westport (Conn.) home. "I was working through the night around the kitchen table, trying to figure out how to pull her empire together," she says. Independent of her relationship with Time Warner, Stewart had dozens of other deals for additional books, TV, and new product lines. The business was so scattered and inefficient that 10 banks refused to lend the women money without getting significant equity. So Patrick renegotiated all of Stewart's contracts, securing advance payments. She even kicked in money of her own to become a minority shareholder.
WALLPAPER TO WHISKS. Among the most crucial deals was one with Kmart Corp., which Patrick persuaded to fork over giant up-front payments and royalties and to build "Martha World" boutiques in prime space. In return, the retailer wanted Stewart's signature on sheets and towels in the burgundy and hunter green she detests. "Sharon helped me convince Martha that this is what the mass market wants," says Steve Riman, a Kmart vice-president.
The result? After floundering for nine years, the relationship is finally paying off. Kmart's Stewart-related revenues will hit $500 million this year--far beyond expectations. With new lines of cooking, gardening, and decorating merchandise--from wallpaper to whisks--on the way, Riman says Martha Stewart will account for 70% of Kmart's $2 billion housewares business by 2000. By then, says Patrick, shares of Martha Stewart Living Omnimedia will probably be public and revenues will be reaching $1 billion. So who cares if she doesn't know a scarab beetle from a june bug?