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The chief executive of Leaf Group, Sean Moriarty, stepped down from the role after nine years last week as the media company faces financial headwinds and pressure from its ownership group, Graham Holdings Company, to reverse its commercial struggles, according to people familiar with the matter.
A spokesperson for Graham Holdings Company, Pinkie Mayfield, confirmed the departure.
Moriarty will be replaced on an interim basis by Timothy J. O’Shaughnessy, the president and CEO of Graham Holdings Company and the husband of Laura Graham O’Shaughnessy, the granddaughter of Katharine Graham, the former publisher of The Washington Post.
Moriarty has served as CEO of Leaf Group since 2014, where he played an instrumental role in reinventing the media company once known as Demand Media.
Fortunes reversed since thriving during the pandemic
After rebranding in 2016, Leaf Group embraced a commercial model that blended commerce from its art marketplaces, Society6 and Saatchi Art, and advertising from its portfolio of publishers, which includes titles like Well + Good, Livestrong and eHow.
The company saw demand for its art marketplaces skyrocket during the early days of the pandemic, when a combination of factors, including stay-at-home measures and stimulus checks, led consumers to spend lavishly on home renovation and decor.
In the first quarter of 2021, Leaf Group saw its overall revenue rise 58% year over year, from $33 million to $52 million, according to public filings. Revenue from Society6 alone rose 106% year over year, from $16 million to $33 million, while revenue from its media group declined slightly, from $14.1 million to $13.9 million.
Although Leaf Group closed that quarter at a $6.3 million loss, its revenues had grown enormously and its deficit shrank by $4.4 million.
These positive trendlines helped convince Graham Holdings Company to acquire Leaf Group in June 2021 for $348 million.
Graham Holdings Company, which owns a portfolio of businesses ranging from restaurant groups to car dealerships, has an extensive background in media. It owns both Slate and Foreign Policy, and it has bought and sold both The Washington Post and Newsweek.
However, the conditions that led revenues at Leaf Group to spike soon began to recede.
As pandemic restrictions eased, consumer spending on home renovation and decor dwindled, and appetite for direct-to-consumer art services like Society6 declined, according to people familiar with its finances. By October 2022, Society6 was on pace to lose roughly $10 million on revenues of between $100 and $150 million.
