Martha begs for leniency, and ads

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Fresh from being sentenced to five months in prison, Martha Stewart stepped toward a phalanx of cameras to deliver a sales pitch to consumers and advertisers. Judging from media buyers' comments, her company could use it.

Ms. Stewart suggested "perhaps all of you out there can continue to show your support by subscribing to our magazine, by buying our products, by encouraging our advertisers to come back in full force to our magazines."

But Robin Steinberg, VP-director of print services, Starcom Media Group's Media-Vest, New York, said it would be "hard for me to recommend for a client to put their ad in a magazine when the person who's name on it is sitting behind bars." (Ms. Stewart remains free on bail, pending an appeal.)

"The unfortunate part is that the damage is done," Ms. Steinberg said, who hinted that "the erosion we've seen with the loss of advertising so far" could be "just the beginning."

Another media buyer who asked not to be named said, "you don't want to be [advertising] on the back cover" and have consumers say "how dare you continue to support" someone in jail.

Requests for comment from key MSLO executives were directed to a written statement the company issued which said it was "saddened for Martha" and would continue to "evolve" MSLO as a "how-to" brand-building enterprise.

The collateral damage to the company is already vast, as courtroom statements from both a sometimes shaky-voiced Ms. Stewart and her attorney Robert Morvillo made clear.

Ad pages at the company flagship Martha Stewart Living-the single largest property at the company-are down 41.8% for the first half of 2004; ad pages have been more than halved from their levels in 2002. In the first quarter of this year all of the company's segments, except for merchandising, posted operating losses. Since then, the company announced it would suspend the TV show "Martha Stewart Living," and chief financial officer James Follo told analysts that ad page losses at Martha Stewart Living were worse in the second quarter than the first. Ms. Stewart told reporters following her sentencing that 200 employees at the company had been laid off in recent months

Kmart Corp., in a statement posted on its Web site, called MSLO "a valued brand partner" and said "we look forward to continuing our mutually beneficial and successful relationship" with the company. Earlier last week, according to published reports, Kmart advertised a 25% off sale on its Martha-branded bed and bath products.

mercy pleas rejected

Judge Miriam Goldman Cedarbaum rejected pleas for mercy, saying that she could find no mitigating circumstances to overcome federal sentencing guidelines. She sentenced Ms. Stewart to five months in prison, five months of home confinement, two years of probation plus a $30,000 fine. Judge Cedarbaum said her sentence was "at the bottom" of Federal guidelines, telling Ms. Stewart,"I believe you have suffered, and will continue to suffer."

Still, some branding experts suggested all was not lost.

"The brand will survive," said Alan Siegel, chairman-CEO of branding firm Siegel & Gale. "If she's smart, she'll show a little remorse." (In her post-sentencing remarks, Ms. Stewart did say she was "very, very sorry it's come to all this," but added that a "small personal matter" had been "blown all out of proportion-and with such venom, such gore.")

"She needs to go away," said Robert Passikoff, founder of consulting firm Brand Keys, "and let the company evolve into what it's going to be...without the queen."

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