The Telegraph
Since 1st March, 1999
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Stock scar on doyenne of domestic bliss

Los Angeles, Aug. 22 (Reuters): She can organise a wedding and whip up a souffle at the drop of a hat. But can Martha Stewart, America’s doyenne of domestic bliss, remove the tarnish from her reputation and her business empire'

Many experts say no, that it’s too late for Stewart to undo the harm caused by allegations that she engaged in insider trading — and that is a recipe for trouble at Martha Stewart Living Omnimedia, her guide to good living company.

She is being investigated for insider trading after selling nearly 4,000 shares of ImClone Systems a day before they fell precipitously on news that regulators refused to review the biotech company’s cancer drug.

Stewart has denied wrongdoing, citing a pre-existing arrangement to sell the stock if it fell below $60 a share. On Tuesday, ImClone shares traded at $8.10 on the US Nasdaq stock market.

“Even if she is legally exonerated, her image as the mistress of homeyness is significantly tarnished. She’s playing this a little too close to the vest. It’s a contradiction of the marketplace image of open, warm and domestic,” said organisational psychologist Dr Ken Siegel.

Stewart, also chief executive of Omnimedia, made her fortune by focusing on — in print, radio and television — crafts and tasks traditionally done by women. In the current pink and lavender issue of Martha Stewart Living, she tells readers how to convert shells and bottles into sand candles.

Someone as culturally prominent as Stewart would be expected to address the public and she has not really done that, resulting, rightly or wrongly, in the perception that she has something to hide, said Steven Fink, president of Lexicon Communications, a Los Angeles-based crisis management firm. “She hasn’t made any new friends with this episode. Now it’s almost so set in concrete it’s hard to see a way out,” he added.

He and other communications experts say Stewart and her minions have badly bungled their response to the ongoing investigation, failing to address it early on and adopting a bunker mentality that has served to inflame the press.

“She thought she could talk her way out — she’s very glib at the microphone, but to go on TV and keep chopping cabbage while a serious reporter is asking questions was not a good idea,” said Fink.

During a June appearance on CBS’ The Early Show, when host Jane Clayson tried to engage her in a discussion of the ImClone sale, Stewart said: “I want to focus on my salad,” adding that she would be “exonerated of any ridiculousness.” Stewart’s appearances on the morning programme have since been put on hold, a spokeswoman for her company said.

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