Martha Stewart Living Omnimedia, the eponymous commercial exploitation vehicle of the convicted media maven, admitted Tuesday that her federal criminal conviction has hit the company's bottom line -- hard.
MSLO chief financial officer James Follo told analysts in a conference call Tuesday that the company will incur losses of around fifty cents a share during the current quarter, ending September 30. As at yesterday, the deficit hovered at 39 cents a share.
In an attempt to staunch the cash hemorrhage, MSLO will shutter its mail order catalog business and fire yet more staff from its corporate payroll, reducing the headcount from 558 at the beginning of this year to 450.
An anticipated $49 million (€40.66m; £26.86m) payment from Kmart, guaranteed under a merchandising contract with the Stewart company, will be paid early in 2005. Between now and then, warned Follo, MSLO will spend about $40m of its $158m cash reserves.
At which arose a great wailing and gnashing of molars by anguished analysts. "I would have expected them to do better in the fourth quarter,' yelped Dennis B McAlpine of McAlpine Associates.
Meantime, the cause of everyone's woes is keeping a low but elegant profile as she contemplates a sentence of five months in jail followed by the same period under house arrest. The sentences remain suspended until Stewart's appeal is heard in December.
Data sourced from: New York Times; additional content by WARC staff