NEW YORK (CNN/Money) - Martha Stewart Omnimedia executives said Friday that they remain committed to the Martha Stewart name, despite a large jump in first-quarter losses as advertisers continue to flee the company's flagship magazine.

Martha Stewart's name will fade at the company she founded.

At the same time, company officials at the lifestyle media and merchandising giant announced a series of changes that indicate they are backing off the Martha Stewart name to focus on non-eponymous products. Everyday Food, a monthly magazine whose circulation has risen 50 percent in the year since it was launched, will no longer carry the tag line "From the Kitchens of Martha Stewart Living." The cover of Martha Stewart Living itself will be redesigned to emphasize the word "Living."

Martha Stewart Omnimedia lost $20.1 million, or 41 cents a share, from continuing operations in the quarter, up from $4.3 million, or 9 cents, a year earlier. Analysts surveyed by earnings tracker First Call were looking for a loss of 20 cents. The company said losses were greater than expected due to income tax expense.

Revenue fell 23 percent to $44.5 million, roughly in line with the $45 million First Call forecast.

Shares of Martha Stewart (MSO: Research, Estimates) fell nearly 6 percent, or 58 cents, to close at $9.12 Friday. The stock price has fallen 33 percent since Stewart was convicted March 5 for lying to government investigators looking into her late 2001 sale of stock in ImClone Systems.

On May 5, a federal judge in New York rejected Martha Stewart's bid for a new trial. Stewart, the onetime queen of domesticity, and her former broker, Peter Bacanovic, had asked for a new trial on the grounds that one juror had not disclosed his prior arrest record. Stewart, who faces 10 to 16 months in prison, is scheduled to be sentenced June 17.

In a Friday morning conference call with analysts, CEO Sharon Patrick said that research since Stewart's March 5 conviction has convinced the company that consumers continue to be loyal to the Martha Stewart brand and are "unfazed" by the verdict. "Seventy percent of our subscribers think it's a bad idea to take the Martha Stewart name off the cover at this time," said Patrick.

Patrick, however, acknowledged that advertisers remain "skittish" amid the "cloud of uncertainty that continues to hang over" the company and its founder. In the first quarter ending March 31, advertising pages in Martha Stewart Living declined 35 percent. In January, the magazine's advertising rate base, or the number of subscribers that the company promises to deliver to advertisers, declined from 2.3 million to 1.8 million.

In response, Patrick said the company would adopt a "hybrid strategy" for bolstering the company brand and growing revenues, emphasizing the world "Living" on the cover of the company's flagship magazine and having contributing writers replace Stewart as the author of its "Remembering" column. Patrick said the change of direction was made with Stewart's support and involvement.

She said advertisers also recognize the value of the Martha Stewart name. "As soon as Martha's personal legal situation is resolved," said Patrick, "we can look for a rebound in advertisers."

Marketing experts said the moves were long overdue. "They're actually doing now what they should have done two years ago, which is to distinguish themselves from what had become a poisoned brand," said Robert Passikoff, a New York-based brand consultant.

C. Britt Beemer, the chairman of consumer behavior research firm America's Research Group, said Martha Stewart Living should have installed a new domestic diva to replace Martha Stewart long ago. He speculated that either Martha Stewart isn't allowing a successor or company officials have been too loyal. "What they have to recognize," said Beemer, "is that the design team behind Martha Stewart knows the American woman better than any other design team in America."

In addition to a drop in Martha Stewart Living advertising, Patrick also cited weakness in the company's cable operations and Internet sales. On a positive note, she said sales of Martha Stewart products at Kmart have risen 6.5 percent since the verdict.

The company said it has $170 million in cash and short-term securities. CFO James Follo said the company is forecasting a second-quarter loss of 35 to 40 cents per share and revenues of $45 million. Wall Street had expected a loss of 12 cents in the second quarter, according to First Call.

Martha Stewart Omnimedia saw revenues fall 16.7 percent to $245.8 million in fiscal 2003. The company lost $2.8 million last year.

Howard Davidowitz, a retail consultant and investment banker at Davidowitz & Associates in New York, said the company needs to do more to rein in costs, including slashing about a third of its workforce. The fact that Martha Stewart Omnimedia is relatively debt-free and has a big cash horde means "this company is not going to go away tomorrow. However, the losses are getting scary."