Martha Stewart Scandal Hits Namesake Media Firm

18 November 2002

The ongoing scandal surrounding US style goddess Martha Stewart continues to affect the performance of the media group that bears her name.

Stewart is implicated in a distinctly unwholesome insider-trading row, having sold nearly 4000 shares in biotech firm ImClone one day before the stock slumped on news that one of its drugs had failed to gain federal approval.

In a filing last week, Martha Stewart Living Omnimedia revealed the continuing probe into Stewart’s alleged involvement in the affair was hitting nearly every aspect of its business.

The scandal, said MSLO, is compounding problems in agreeing distribution arrangements for next autumn’s Martha Stewart Living television show. It is also affecting circulation of the company’s magazine, hindering its search for new business partners, pushing down ad revenues and hitting response rates to its direct mail activities.

What is more, things could get worse. “We cannot currently predict with any certainty the extent of the impact these investigations will continue to have,” the company admitted.

Data sourced from: Financial Times; additional content by WARC staff