New York, NY, Mar. 11--Martha Stewart has acknowledged she must step down from her company's board of directors and now is seeking a replacement capable of representing her interests as the majority shareholder, according to Newsday.
Talks continued yesterday with the six board directors speaking via telephone as they wrestled with the ramifications of Friday's guilty verdict against Stewart. The deliberations also reportedly include her future participation in creative activities such as the development of new products.
Stewart wants to remain involved in the creative endeavors of Martha Stewart Living Omnimedia Inc., whose roots date back 30 years to a catering business begun in her Connecticut home. "She has a lot of contributions yet to make," a source said. "But she wasn't begging; that's not her personality to do that. It was a rational discussion," the source said, referring to the face-to-face board meeting held Monday at a law office in Manhattan.
A decision on Stewart's future role could come as early as today, another source said. A spokeswoman for Martha Stewart Living declined to comment.
The critical negotiations are occurring as company executives seek to reassure retailers and consumers that Stewart's conviction doesn't doom her homemaking empire, in which she owns 61 percent of the stock.
On Monday, Sherwin-Williams executives were on the phone multiple times with the top brass of Martha Stewart Living to discuss the fallout on their paint products and to plot future strategy. Similar conversations continue to take place, some involving chief executive Sharon L. Patrick.
The message appears to be getting through. A Sherwin-Williams official said he was confident Martha Stewart Living will persevere despite its namesake's woes. "In our estimation Ms. Stewart's personal legal situation, although unfortunate, doesn't undermine those things that provide value," said executive Bob Wells.
Sherwin-Williams produces an upscale paint line called Martha Stewart Signature for its 2,200 stores. It also provides a separate paint line to Kmart and Sears stores.
Paint and other merchandise sold under Stewart's name generated 21 percent of her company's total revenue of $245 million last year. But stock analyst William Drewry of Credit Suisse First Boston predicted further deterioration in magazines, which account for more than half of all revenue.
Douglas Arthur of Morgan Stanley predicted the TV unit would be disbanded. Shares in Martha Stewart Living fell for the third day, albeit by a modest 35 cents, closing at $9.55 a share.
