Is Martha's Other Shoe Dropping?

A year and a half after ImClone, it looks like the Feds are getting ready to indict Martha Stewart.

It is interesting to note the challenge it presents her company in moving forward:

"Sales at Martha Stewart Living Omnimedia have suffered since Stewart's trouble began. The company lost money in its first quarter, reflecting weak advertising at its flagship magazine, weaker-than-promised sales at retailer Kmart Corp. and Stewart's legal problems.

Adams Harkness & Hill analyst Laura Richardson said the company faces competition on several fronts. That means that simply firing Stewart and changing the company's name won't be enough to solve its problems, she said.

"There are three sides of the company -- the personality side, the creative side and the advertising side," said Richardson. "If you change the personality without changing the creative side, that's not good for the company."

What will MSLO's strategy be moving forward? Changes are clearly afoot for the communications empire which gets 62 percent of its revenue from publishing. And as discussed about a year and a half ago in SPR, Martha's silence strategy continues.