Martha Stewart Living found Dienst as a good fit due to his success with repositioning and growing public companies.
Dienst served as chairman and CEO of Metal Management Ltd. from 2003 to 2008, when it was sold to Sims. He then took the helm at the newly combined company, helping to guide it through the recession. From 2002 until 2005, he also served as chairman and acting CEO of Metals USA Inc. after its restructuring, until it was sold to a private equity firm in 2005.
"(Dienst) is a highly respected and experienced public company CEO with strong operating and financial discipline and a clear track record of creating significant value for shareholders," said Martha Stewart, founder and non-executive chairman of the company in a statement.
Dienst said he has "long been a fan of Martha Stewart, the person and the brand," and believes there is "enormous untapped opportunity for this organization."
Dienst added that the company is embarking on a turnaround plan that's expected to produce "good early results." But he noted "there is a lot more to do to achieve our long-term objectives."
The announcement comes as Martha Stewart is looking to boost merchandising sales as it continues to grapple with a weak publishing business amid sluggish advertising sales.
Martha Stewart suffered a blow last week, when J.C. Penney Co. scaled back its partnership with the company ahead of a ruling in its long-running fight with Macy's over Martha Stewart products.
The department store chain will no longer sell a broad range of home and bath products designed by Martha Stewart Living, the two companies announced. Penney will continue to sell a smaller batch of Martha Stewart items, including window treatments, rugs and party supplies.
Penney will also be returning the media and merchandising company the 11 million shares it bought as part of the 2011 licensing deal and giving up two seats on Martha Stewart's board.
Plano, Texas-based Penney and Martha Stewart signed a merchandising deal in December 2011. That prompted Macy's Inc. to sue both companies for violating its exclusive agreement with Martha Stewart.
Martha Stewart Living Omnimedia Inc. reported in July that its loss narrowed in the second quarter, helped by solid sales of its merchandise and expense-cutting moves over the past 18 months. The company is expected to report third-quarter results Tuesday.
Shares rose a penny to $2.40 in morning trading.