Martha Stewart quits company board - East Valley Tribune: Business

Martha Stewart quits company board

Print
Font Size:
Default font size
Larger font size

Posted: Monday, March 15, 2004 12:10 pm | Updated: 5:42 pm, Thu Oct 6, 2011.

NEW YORK - Martha Stewart resigned Monday from the board and as chief creative officer of the media empire she built, a little more than a week after she was convicted of lying to investigators related to a 2001 stock sale.

The self-made queen of domestic arts -whose name has been stamped on magazines, TV shows and household products - will remain affiliated with Martha Stewart Living Omnimedia Inc. in a new non-executive role of founding editorial director.

In that role, Stewart, 62, will continue to provide creative inspiration for new product design and development; pen two pending books, "Homekeeping" and "Baking"; and provide input on the continuing evolution of the company and its brand and strategic issues. She will report to chief executive officer Sharon Patrick.

Stewart, who is the company's largest shareholder, had been expected to relinquish her board seat, but possibly keep some creative non-officer role. Had she not stepped down, her departure from the board and any executive position would likely have been forced by the Securities and Exchange Commission, given that she is a convicted felon.

Stewart resigned as chairman last June, after she was indicted on charged related to her well-timed sale of stock biotechnology company ImClone Systems Inc. in December 2001.

Still, Monday's shuffle - while it further diminishes Stewart's role in the company - shows that company officials believe they are better off with Stewart than without her. They're also counting on consumers and viewers to separate her legal issues from the brand.

"Everyone at MSO recognizes the seriousness of Martha's situation and is deeply saddened," said Patrick in a statement. "However, all of us also believe that the company and our constitutencies benefit most if we are able to continue to take advantage of Martha's creative inspiration and capitalize on her prodigious skills and experience in the domestic arts."

In a statement, Stewart said Monday's action was "in the best interest" of the company.

"I am heartsick about my personal legal situation - and deeply sorry for the pain and difficulties it has caused our employees," she said. "I look forward to continuing to collaborate on a wide range of creative ideas with the amazing, talented and hardworking people at this very special company."

The question remains how involved Stewart can be, since she will likely serve 10 to 16 months in prison, where there are restrictions on phone time and visitation. She'll also be required to work 35 to 40 hours per week at a menial prison job.

Stewart is scheduled to be sentenced in June. She said she will appeal the March 5 verdict.

Shares of Martha Stewart Living fell more than 4 percent on the news, before recovering somewhat to trade down 24 cents, or a little more than 2 percent, at $10.09 on the New York Stock Exchange.

Since Stewart's name was tied to the ImClone trading scandal 22 months ago, her multimedia company has seen its stock plummet 40 percent; and suffered from declining sales; financial losses and a defection from its advertisers.

Following the guilty verdict on four federal charges, the company suffered more blows. Her syndicated television show, "Martha Stewart Living," was dropped by Viacom; and The New York Times said two columns its syndicate distributes would be renamed, dropping any references to Stewart, and would be written by people other than the homemaking queen.

The company began moving away from Stewart's name a year ago with the launch of Everyday Food and is now testing another publication called "Organizing Good Things." But it remains heavily tied to her aesthetic values and her image.

  • Discuss

EVT Ice Bucket Challenge

The East Valley Tribune accepts the Ice Bucket Challenge.

'EV Women in Business'

A PDF of the Tribune special section, featuring a mix of sponsored content from our loyal advertisers and newsroom coverage of the East Valley business community.

Your Az Jobs