[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Wednesday, 10 March, 2004, 08:20 GMT
Martha Stewart may stop using the name

By Stephen Evans
BBC North America business correspondent

Martha Stewart
Martha Stewart may face a jail sentence

Can Martha Stewart Living Omnimedia thrive if Martha Stewart is behind bars?

After all, being in jail does present some practical problems - it is hard to present a television programme about etiquette or style in the garden when you are banged up in prison.

This is not the place to make jokes about what colour is currently fashionable for cell walls - for those and other varieties of schadenfreude (or just plain gloating), turn to virtually every other publication available in the United States.

But beyond the unavailability of the anchor to present the programme, there are other difficulties ahead.


Publishing is the company's biggest source of revenue, and some advertisers may take the view that having their name in Martha Stewart Living magazines would be to associate themselves with failure.

Certainly, the stock price mirrors concerns.

It had ticked along at around $13.60 until news came out that a verdict was imminent on Friday.

Because deliberation had been shorter than expected, traders assumed - or at least bet - that she would be cleared, so the share price rose to $16.59.

When the real, damaging verdict emerged, the price fell to $10.86, down by 34% from its pre-verdict high.

The fall continued on Monday.


The drop is understandable even as the board of the eponymous Martha Stewart Living Omnimedia met to discuss "contingency plans".

Martha Stewart merchandise
Customers still love the Martha Stewart merchandise
The magazines have already suffered and that is not likely to ease; the television programme has been dropped from some prominent stations.

Only the merchandising seems to offer hope.

When the company reported its financial results earlier in March, revenue had fallen at all of the company's other divisions.

Only sales of Martha branded goods rose.

The reason seems to be that the goods are attractively made and priced.

In other words, they sell because of their quality and not because of their association with a particular person.


Of course, Martha Stewart is not, as they say, just a pretty face.

She is also an extremely astute businesswoman.

The success of her company is to do with her own acumen, a skill which might be available from behind bars, should she be placed there by the judge on 6 June, though it seems more likely that constraints will be placed on her ability to get involved with her own or anyone else's business.


Whatever the board and Martha Stewart want, the authorities are likely to insist on a distancing of her from her company.

The case of Steve Madden is not a happy precedent.

He, like her, created a company that bears his name.

He, like her, committed crimes of dishonesty (securities fraud in his case).

He, like her, relinquished official titles within the company that bears his name.

He, probably like her, was sent to prison (where he still resides).

New name

Federal agents asked earlier this year if he was still participating in the running of his shoe company.

Steve Madden has no official titles, but when the chief executive of Steve Madden Ltd visited the prison, the authorities queried whether business was being discussed.

Martha Stewart has already relinquished her chief executive and chairman titles.

She may also have to relinquish all other forms of control.

The parent company may even ditch her name - people may not be put off buying Martha Stewart saucepans because of the criminal taint to the brand, but they might be less likely to buy stocks.

Already, some other columns have had her name removed.

The weekly "AskMartha" on housekeeping and entertaining, which was syndicated across American newspapers, will be written by other people and known simply as "living".

Another column, "AskMartha Weddings", will be written by one of her colleagues and simply called "weddings".


News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East | South Asia
UK | Business | Entertainment | Science/Nature | Technology | Health
Have Your Say | In Pictures | Week at a Glance | Country Profiles | In Depth | Programmes
Americas Africa Europe Middle East South Asia Asia Pacific