|Martha's prison stay will be the subject of an unauthorized made-for-TV movie on CBS this fall.|
NEW YORK (CNN/Money) -
Months from now, consumers may look back on these sleepy summer months as the calm before the storm.
Martha Stewart, whose three-year odyssey in the criminal justice system will end just about the time she turns 64 early next month, is about to figure in the nation's psyche in a big way.
Stewart already has revealed "M. Diddy" as her prison nickname in a cover story in this month's Vanity Fair. She's just wrapped up filming for her own edition of the Donald Trump reality series "The Apprentice."
She is working on a daily talk show also set to air this fall on NBC while preparing to launch an around-the-clock channel as part of a $30 million deal with Sirius Satellite Radio (Research). And, it was announced Wednesday, she's writing a business handbook to be published in October called "Martha's Rules."
That's not all. Looking for its slice of Martha mania, NBC rival CBS plans to broadcast in September its second unauthorized movie about the Stewart saga. "Martha: Behind Bars," also starring Cybill Shepherd, will detail Stewart's recent stay at a minimum-security womens' prison in West Virginia.
Stewart has one goal in mind: to revive her image and its luster at Martha Stewart Living Omnimedia, the New York media and retail company that she founded.
On the path to profitability?
Martha Stewart Living (Research), which publishes magazines and whose home furnishing products are sold through Kmart and other outlets, is expected to report July 27 that it lost 28 cents a share in the second-quarter on a two percent decline in sales, to $43 million, according to Thomson First Call estimates.
The estimates suggest that the company's losses are shrinking. One reason for optimism: Martha Stewart Living says second-quarter advertising at the company's flagship Martha Stewart Living magazine, its single biggest source of revenues, will show a 42 percent gain in ad pages from a year ago.
Even so, magazine ad pages are still well below the numbers of two years or more ago. And some analysts suspect that the uptick in advertising is due less to renewed interest in the magazine than a strategy by Martha Stewart Living to sell packages of advertising that include television, radio and print.
Gary McDaniel, an analyst with Standard & Poor's, expects that the advertising bundles are drawing interest from marketers.
The "Apprentice" spinoff and Stewart's daily talk show "are going to have a big splash when they first start and the ratings will be fairly good," he said. "Advertisers know that as well and that's what is enabling the magazine to turn around."
Like McDaniel, New York branding expert Robert Passikoff thinks a renaissance won't be easy for Stewart or her company -- and it won't happen overnight. Analysts, in fact, don't expect Martha Stewart Living to return to profitability until near year.
Passikoff points out that competition in the lifestyle sector, all but non-existent just a few years ago, is fierce and intensifying further.
Passikoff, who tracks consumer perception of the Stewart brand, said her image has improved from the low reached when she was convicted in March 2004 for lying to government investigators about a personal stock trade. Yet consumer opinions, he said, aren't even close to what they were before Stewart's legal troubles started.
And Passikoff, the president of New York-based marketing firm Brand Keys, doubts consumer attitudes will ever recover fully.
"She used to be the queen in the castle on the hill, looking down on everyone else in the valley," continued Passikoff. "Now she's in the valley with everyone else, fighting it out on a level terrain."
Martha Stewart Living provided some facts for this story, but declined further comment.
A yo-yo stock price
Martha Stewart Living shares are highly volatile, having more than doubled since Stewart was sentenced a year ago and yet trading more than 20 percent off a 52-week high set just before Stewart was released from prison in early March. Stewart spent five months in a minimum-security lockup in West Virginia.
The volatility is due in large part to the fact that Stewart owns more than 60 percent of the company's shares. With relatively few shares available to be bought or sold, even a small amount of trading activity has a big impact on the share price.
Today, all but one of the few analysts who cover Martha Stewart Living recommend that investors sell their stakes. Standard & Poor's McDaniel estimates the stock is worth closer to $17 a share, much less than the $29 level it trades at today.
While McDaniel thinks Stewart and her company are making the right moves, much about their turnaround strategy remains unknown.
He cites the uncertainty surrounding Martha Stewart Living's venture with Kmart.
Same store sales, a key measure in the retail industry of consumer demand for a product, have been falling. This spring Kmart merged with Sears and, said McDaniel, it's still unclear what the combination will mean for the royalty payments Kmart now makes to Martha Stewart Living to carry its "Everyday" line of home furnishings.
And what about the television shows? McDaniel isn't so sure either one will be long-term ratings winners.
The "Apprentice" spinoff was risky, he said. On the one hand, Stewart couldn't mimic Donald Trump's brusque manner given that her own reputation for flinty hasn't helped her in the public's eye.
At the same time, warm fuzzy is boring. "Nobody's going to want to watch that," he said.
"Yes, they're recovering and they're doing better," said McDaniel, speaking generally about Stewart and her company. "But they still have a ways to go."
To read more about Stewart and other big names in the news, click here.