RBC Capital Markets said the goals are unclear as Martha Stewart Living Omnimedia Inc. (NYSE: MSO) cleaned management house, while hiring an investment bank to explore strategic partnerships.

Martha Stewart Living Omnimedia announced on Wednesday morning that it hired a President/Chief Operating Officer (the company had been without a formal President and/or Chief Executive Officer for the past 2 years); replaced its Merchandising segment head; would be adding Martha Stewart back to the Board; and retained investment bank Blackstone to explore “strategic partnerships”.

We think these actions suggest that Martha Stewart Living Omnimedia has become frustrated with its somewhat stalled overall growth, especially with the pace of its global licensing. Hiring a new President/Chief Operating Officer (COO) should tighten the day-to-day operations at the company, allowing for increased efficiency and potentially higher growth, said David Bank, an analyst at RBC Capital Markets.

Bank said he is not sure if Martha Stewart Living Omnimedia is looking to aggressively shop the company, but it would not surprise him if the search for strategic partners includes parties that could make financial investments, as well as strategic ones.

That said, outside of a full arb situation, the acceleration in fundamentals required for Martha Stewart Living Omnimedia to grow meaningfully past its current valuation is somewhat of a show-me story.

Lisa Gersh is an experienced media executive in women’s lifestyle media, having co-founded and run Oxygen. She also managed other mass market broadcast/online properties such as The Weather Channel.

Bank views Lisa Gersh's appointment as President/COO (with the anticipation that she will be named CEO in 12-20 months) as a positive in that day-to-day management will now fall under a dedicated operating executive. Chairman Charles Koppelman (who had been acting as de facto CEO) will be allowed to focus on broader strategic initiatives.

Bank said he would expect Gersh to bring aboard a Chief Financial Officer (CFO) at some point soon (there is currently no official CFO at Martha Stewart Living Omnimedia).

Bank said he may be over-thinking it, but he finds it interesting that Blackstone wasn't retained to seek strategic alternatives (which he views as an euphemism for shopping the company), but rather strategic partnerships.

We think Blackstone may have been hired to establish global relationships with potential strategic (i.e., operational) partners to help grow the company's global brand licensing initiatives, and there could easily be a financial investment component to such relationships. However, we aren't sure if the company is necessarily actively shopping the company, said Bank.

Martha Stewart Living Omnimedia stock rose 1.07 percent to $4.72 on the NYSE in the pre-market trading.

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