NEW YORK (CNN/Money) -
Forget extreme makeover. Think nip and tuck.
Some three months after Martha Stewart Living Omnimedia (MSO) announced it would redesign its flagship magazine in the wake of Martha Stewart's felony conviction and steep advertising losses, the revamped cover hit newsstands over the weekend.
The new look leaves little doubt that the beleaguered company, which continues to hemorrhage money, is still hedging its bets.
The changes, which appear in the September issue, are far more symbolic than substantive. Against a seafoam green backdrop featuring a do-it-yourself decoupage dresser, the word Living appears in slightly larger type, with only the letter 'g' sporting a different form.
The name Martha Stewart, which has appeared prominently in a separate box in the upper left-hand corner, is now in a smaller font size and sits above and to the right of the word Living.
Where Stewart herself was once featured prominently throughout the magazine, now the only reference to the one-time queen of domesticity is on the masthead, where she is listed as founding editorial director, and in the "Editor's Letter."
Stewart, who once served as the company's chairman, chief executive and chief creative officer, took on that title soon after she was convicted in March of lying during an insider trading probe of some of her personal stock sales.
Beyond these changes, the special decorating issue sticks to its tried-and-true formula of recipes, household tips, and gardening advice. Gone is Martha Stewart's "Remembering" column in the front of the book. In its place is a September calendar reminding readers that it's almost time to start cleaning their radiators and composting in preparation for colder climes.
As part of a strategy to build the image of company personalities other than Stewart, the issue highlights the work of three top staffers.
In an open letter that appears in the front of the book, editor-in-chief Margaret Roach reminds readers that September means change, which "though necessary and often a sign of new growth, isn't always comfortable." Stewart, she writes, is taking time to "attend to her personal legal matters."
Martin Walker, a New York magazine consultant, said a more radical overhaul was unwarranted at this time. "There's nothing wrong with the magazine itself," he said. "The only problem is that advertisers are concerned about associating and identifying themselves with....a jailbird."
Waiting for Martha
Stewart, 63, was sentenced in July to five months in prison and five months of home confinement, following her conviction on obstruction of justice charges. Stewart, who is appealing her conviction, has said publicly that she is considering serving her time in the near future in order to put the ordeal behind her.
"My company needs me," she said in an post-sentencing interview on CNN's Larry King Live. "I would like to get back to work. I would like this to be over."
There's little doubt that Stewart's legal woes have severely hobbled MSO. For the first time since it went public in 1999, MSO posted a loss in 2003, just months after she was indicted on five criminal counts stemming from her well-timed sale in late 2001 of ImClone Systems (IMCL: up $1.53 to $54.95, Research, Estimates) stock right before shares plunged on news of a major company setback.
Midway through 2004, the company continues to suffer from its founder's woes. Earlier this month, Martha Stewart Living Omnimedia (MSO: down $0.22 to $11.13, Research, Estimates) reported a second-quarter loss of $19.2 million, or 39 cents a share. Analysts surveyed by earnings tracker Thomson First Call forecast an average loss per share of 33 cents.
The results followed a first-quarter loss of $20.1 million, or 41 cents a share.
Martha Stewart Living, the flagship magazine, has borne the brunt of Stewart's downfall. Advertising pages were off nearly 50 percent, to 147 pages, in the first six months of the year. Advertising rates have also declined as the company lowered the circulation rate it guarantees advertisers, from 2.3 million to 1.8 million, earlier this year.
To stem the losses, Chief Executive Officer Sharon Patrick has said the company is adopting a "hybrid strategy." That involves keeping the Martha Stewart brand name while also investing in noneponymous products, such as the year-old Everyday Food magazine.
Last week, MSO bought Body & Soul magazine and Dr. Weil's Self Healing newsletter. Earlier this month, it also announced a new Everyday Food weekly television show that will feature five cooks, none of whom go by the name of Martha Stewart.
Meanwhile, original episodes of Stewart's own syndicated television show, "Martha Stewart Living," have been put on hiatus.
According to Patrick, these changes and others have all been made with the support and involvement of Stewart, who owns the majority of the company voting shares.
Walker, the magazine consultant, said Martha Stewart Living's redesign was most likely vetted carefully with readers, some of whom no doubt see Stewart as a scapegoat for overzealous prosecutors.
"I think that her name made the magazine stronger. That's why they kept it," said Walker.
The new look, the costs of which Walker said were probably small, gives the company two options. Either it positions her for a comeback once her legal woes are resolved and advertisers are comfortable supporting her. Or, said Walker, they can keeping shrinking her name on the cover if problems persist.
"The might be handling it in an evolutionary way, without making a lot of noise," said Walker.
Consider the tagline the company is using as part of an three-month advertising campaign launched Monday to promote Martha Stewart Living's new face: "Take a New Look at Living."
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