Does Martha Stewart still matter?

By BusinessWeek

Martha Stewart is deeply immersed in what she calls "this era of me." Since completing her 10-month sentence, in August 2005, for lying to government officials about a stock sale, the lifestyle guru has spent most of her waking moments trying to bring the world back to Martha.

She has helped design new homes, forged a slew of merchandise deals, completed a 750-page book and launched her 24-hour radio channel. She hosts a daily live TV show. She's helping to create a search engine of Martha-approved sites and even is developing a line of food.

Stewart feels vindicated -- and tired.

"I don't go out as much at night as I used to," she says, noting that she can't get her mind off work long enough to enjoy a Broadway show. "And I don't have enough time to travel. I just don't. There's too much to do."

To all the naysayers who said her 15 minutes were finally up, the implicit message is: Take that. Securities regulators may have stripped her of the chairman and CEO title and denied her a seat on her own board -- something that pains her to this day -- but Stewart is dreaming big again.

No baby-sitting

Something fundamental has changed, though: Stewart no longer has total control over the brand she built.

She still owns the bulk of the company's stock and holds 92% of the voting power -- prompting speculation that she may one day take it private -- but she can't dictate the agenda. She has a strong and media-savvy CEO in Susan Lyne, who Stewart says "is extremely fair in letting me know almost everything that's going on."

Stewart also answers to an independent board, led by cigar-chomping entertainment veteran Charles A. Koppelman -- a man so un-Martha-like that he refers to flowers as "some pink things" and thought nothing of putting up in his office a massive poster of his grandchildren, visible from the otherwise austere halls of headquarters.

Does Martha's company still need Martha?

Moreover, what was once an army of mini-Marthas with careers largely tied to their famous boss has morphed into a more eclectic and professional management team. Sally Preston of Rodale has come in as senior vice president of publishing; Yahoo! (YHOO, news, msgs) veteran Holly Brown manages the Internet business; and former Kate Spade President Robin Marino has taken over merchandising.

As Lyne puts it: "We've got people running segments who can do a lot of their work and planning independently. They don't need to be baby-sat in any shape or form."

Is Martha Stewart Living Omnimedia (MSO, news, msgs) now at the point where it may not need Martha Stewart to survive?

Lyne, who became CEO in late 2004, certainly thinks so, noting that "we have a depth and breadth that wasn't there a year ago." While the former ABC Entertainment president and Premiere magazine founder isn't about to back away from the woman who defines the brand, she treads carefully: "We are embracing it, but trying not to overuse Martha, the personality."

• Video: Will Martha Stewart go private?

Even perennial pessimists such as Dennis B. McAlpine of McAlpine Associates says he's "very impressed with Susan's ability to get things done. There's a move to make Martha Stewart more like Betty Crocker, more ephemeral."

A looming presence

Stewart, naturally, prefers not to talk about what the company would be like without her. At first, she will only express the hope that her name will have the longevity of Coco Chanel's or Walt Disney's. When pressed, she does say that "if I played a lesser role, the company could still do extremely well."

At 65, though, she considers that prospect to be far off. She has no intention of pulling back her looming presence over the brand. She saw the damage that downplaying the Martha Stewart name caused for her company during "the legal problems," and she won't let that happen again.

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