Ms. Stewart last week resigned as director and chief creative officer-and took the role of founding editorial director-after her conviction on charges of conspiracy, obstruction of justice and lying involving her stock sale in another venture.
She still can pull the strings, including offering "input" on her board replacement. Some input: Ms. Stewart owns 61% of her company and 94% of voting power.
The company's 1999 filing for an initial public stock offering noted she has "the ability to control the outcome of all matters requiring stockholder approval, including the election and removal of our entire board... and the ability to control our management and affairs." That IPO made clear the risks: "Our business would be adversely affected if Martha Stewart's public image or reputation were to be tarnished. ... Our continued success and the value of our brand name therefore depends, to a large degree, on the reputation of Martha Stewart."
The company has largely failed on a strategy revealed in its long-ago stock offering ("to reduce our dependence on Martha Stewart"). But better late than never. Risks of staying with a tarnished brand are greater than risks of rebranding. "Everyday Living," which the company moved to trademark in January, is a good option for the everyday lifestyle espoused by the flagship product, Martha Stewart Living.
Ms. Stewart is not helping her cause with advertisers by keeping her name as the defining brand. She is a shrewd executive. It's her company. Let's see if Ms. Stewart is savvy enough to do the right thing. With a smart rebranding strategy, the company has a chance to meet the needs of consumers, advertisers and investors. Every day.