Stephen M. Silverman
August 12, 2003 01:00 PM

Bad economic news for Martha Stewart: Her company announced Monday that its second-quarter net earnings fell 86 percent, with little hope for recovery this year, the Wall Street Journal reports.

Such news from Martha Stewart Omnimedia Inc. is being viewed as yet another sign that the legal woes plaguing the domestic diva over an insider stock trading scandal remain an albatross for the once-thriving firm, notes The New York Times.

Stewart, 62, faces trial in January on federal charges stemming from her sale of ImClone Systems shares — essentially on charges of obstructing justice during the Justice Department’s investigation of her. Stewart has maintained her innocence throughout.

Stewart’s company, reports The Times, has been in high gear over the past 14 months (since the scandal first broke), producing items that do not bear the Martha Stewart name.

This includes bringing in experts from other fields and using their names on products and on programs, such as pet expert Marc Morrone.

The company’s Martha Stewart Living core brand remains under “significant pressure” until Marta’s legal status is resolved, the company’s new CEO, Sharon Patrick, who took over for Stewart, tells the Journal.

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