Martha Stewart's To-Do List May Include Image

[sassa]

Martha Stewart's To-Do List May Include Image Polishing

By ALESSANDRA STANLEY and CONSTANCE L. HAYS

Blondenfreude, the glee felt when a rich, powerful, and fair-haired business woman stumbles, is the guilty pleasure of the age.

Martha Stewart has often complained about the cultural bias that punishes women for the Type A traits that are admired in their male peers.

For the first time in her closely watched career, however, Ms. Stewart is fighting accusations of impropriety that have nothing to do with gender roles. Even the unproven suggestion that she is involved in an insider-trading scandal threatens to cast Martha Stewart as just another tycoon trying to get a little bit richer by skirting the rules. At a time when many Americans are expressing a post- Enron populism, Ms. Stewart is being grouped with plutocrats like L. Dennis Kozlowski, the former Tyco International chief executive who was charged with pretending to ship art works to New Hampshire to avoid the New York sales tax.

Her fans have long known, and do not mind, that Martha Stewart is a lot tougher than she looks. But in the long run, this latest refraction of her image could prove more damaging to her reputation than complaints that she is an über-perfectionist who turns chilly and imperious once the kitchen door closes. The Martha Stewart media and marketing empire is intimately woven around her persona. Greed or the misuse of privileged information, if proven, was never part of the package.

Her troubles come as investors, burned by the dot-coms, the Enrons and other flame-out stocks, are seeking trustworthiness at the top. Ms. Stewart's company had maintained such a pristine reputation that earlier this month, she became a director of the New York Stock Exchange.

The day she came aboard, it was revealed that she had sold $227,000 in shares of ImClone Systems on Dec. 27, the day before the announcement that the Food and Drug Administration had rejected ImClone's application for a cancer drug. ImClone, the biotechnology company founded by Samuel D. Waksal, a close friend who was arrested on insider-trading charges on June 12, is being investigated by both a Congressional committee and the Securities and Exchange Commission. On Friday, Merrill Lynch suspended the stockbroker who handled the sale of her shares, pending further investigation.

Ms. Stewart, whose trade is also being investigated by Congress, has repeatedly denied any wrongdoing. But her own company's stock, having rebounded somewhat, is still down 17 percent from June 5, the day before the disclosure of her ImClone stock sale. The broader market has also fallen, but far less.

Like Tina Brown, of the defunct Talk magazine, or Carleton S. Fiorina, the chief executive of Hewlett-Packard, Ms. Stewart, who is 60, has become a Rorschach test of women's and men's anxieties about female success. Tabloids have splashed her current travails on their covers with daily updates.

Her appeal still rests on her contradictions — her curious blending of the stay-at-home values of the 1950's with the career empowerment feminism that has been developing since the 1970's. Her promise of gracious homemaking, and the fact that she delegates much of her own chores to sell the dream to customers, seems to have renewed resonance today. Career women are besieged by warnings to put home and family first, most lately by Sylvia Ann Hewlett in her widely quoted book, "Creating a Life" (Talk Miramax Books, 2002).

Ms. Stewart is the face, voice and hands behind the brand, a woman who appears on television some 30 times a week; does radio reports for CBS that air in 360 markets, and writes a column, "Ask Martha," that is syndicated by The New York Times in some 220 newspapers around the country.

She has more than 40 books, a magazine, a gardening show and a cooking show on cable, and a syndicated lifestyle show carried by CBS affiliates. She appears regularly on "The Early Show" on CBS and has a television special tailored to the December holidays. Blue toile chairpads and acorn-embossed relish dishes from her Martha Stewart Everyday product line are sold on her Web site and in all 1,900 Kmart stores across the country.

She made her fortune by turning a private pastime into a profession: the arts and crafts of the home, whether that meant gilding an Easter egg or assembling a perfect pie. She knew how to do these things, or someone on her staff did, and Martha Stewart Living Omnimedia, the company she founded in 1997, has grown to become a $295 million business that last year produced $21.9 million in profit for Ms. Stewart and its other shareholders. She raised tastes across the nation, replacing polyester-blend sheets with the pleasures of Egyptian combed cotton, even at Kmart. As preoccupied as she is running a major company, guests report that she polishes her own silver into the night and still bakes desserts like plum tarts for her large dinner parties.

Her rise from a working-class Polish family to chief of her own company is the stuff of a Judith Krantz novel. Born Martha Helen Kostyra in Jersey City on Aug. 3, 1941, she worked her way through Barnard College as a Park Avenue maid and a model. She married a Yale-educated lawyer and had her own brief Wall Street career before becoming a full-time mother and Westport, Conn., hostess. Then came her stints as a suburban caterer and cookbook author, and the rest.

Along the way, "Saturday Night Live" comedians, among others, parodied her shows and recipes. Writers like Joan Didion and Camille Paglia have tried to pin down her cultural significance. Perhaps reflecting her own preoccupations, Ms. Paglia, a postfeminist, wrote that after the Stewarts' divorce, "She cut her hair. Now she's a self-complete man/woman on her estate, run by invisible serfs."

In fact, disgruntled former employees, complaining of mistreatment or underpayment, have made themselves heard. A gardener sued in 1996 to collect overtime; Ms. Stewart eventually won.

On camera, she is a calm, smiling arbiter of taste, who speaks in a pleasingly low, patrician tone, and articulates every word, even "but-ter" or "per-fect." Off camera, guests complain they have been ignored.

She also has her fans, like Lisa Hall, a jewelry designer from Maine who has appeared on a Martha Stewart show taped in the summer of 2000.

"We spent maybe half a day together," Miss Hall said. "It was actually better than I thought it would be. She was very professional and friendly. She was a lot easier to work with than some of the people who were working for her."

Ms. Stewart has said little about the ImClone investigation. Her television appearances airing now were all taped before the ImClone scandal broke. On Thursday, on the Food Channel, she demonstrated how to trim the edges of poached eggs with scissors ("it looks much neater") for an impeccable eggs Benedict.

That same day, though, there was at least one televised reminder of current events: On CBS in New York and other affiliates, Ms. Stewart's company reran a cooking segment she did with Representative Billy Tauzin, Republican of Louisiana, who heads the Congressional committee looking into ImClone stock trades and other dealings surrounding the company's efforts to market a colorectal cancer drug. The show featured Mr. Tauzin stirring his signature gumbo with a chatty and cheerful Ms. Stewart at his side.

"What in the world are they thinking?" Ken Johnson, a spokesman for the House Energy and Commerce Committee, said regarding the rerun. "Was this a scheduling quirk, or was someone trying to send us a valentine?" It was the former, a spokesperson for Ms. Stewart said.

Melding the professional and the personal has marked Martha Stewart's dealings from her days as a stockbroker to the present, where she sits atop an empire that is a business school blueprint of synergy. Her TV shows sell her magazines, her Web site sells her products, her products sell her TV shows.

On June 15, Ms. Stewart alternated as a guest and hostess at a celebrity-filled wedding in Redding, Conn. — where the line between friendship and business was as blurred as a sponge-painted bedroom ceiling. Ms. Stewart, who is a friend of the bride's parents, the film director Barry Levinson and his wife, Diana, spent four months helping the bride, Michelle D. Levinson, plan the wedding, a white and green "Midsummer Night's Dream" fantasy in a tent beside their private lake. Mingling with guests like Robin Williams, Jon Bon Jovi and Michael S. Ovitz, Ms. Stewart seemed relaxed and showed no sign of strain, her close friend and fellow guest, Memrie Lewis, recalled.

"This is something that anyone would find disturbing," Ms. Lewis, a landscape designer who has known her for more than 20 years, said, referring to the investigation. "But she was calm and didn't seem concerned at all."

Which is just as well since she had brought a photographer and film crew there to capture the moment for her wedding book and her television show. The Martha Stewart Living synergy did not stop there. The newlyweds joined the Martha Stewart online wedding registry, selecting such items as a $68 set of silver-plated Saint Hilaire cocktail picks with elephant tops.

Almost from the beginning, Mrs. Stewart built her career on her friendships. As a stockbroker in the late 1960's, she had many friends as customers. That continued with her suburban Connecticut catering business in the 1970's and her subsequent ventures.

Her long friendship with Mr. Waksal of ImClone has been especially intricate. He persuaded her to invest in his company, ImClone, and he dated her daughter, Alexis, for years. They share a stockbroker, Peter E. Bacanovic of Merrill Lynch, who was asked to appear before the Congressional panel this week. All three have long been regulars at social events around the city.

Mr. Bacanovic is also a former employee of ImClone. Though he left a decade ago, it is a detail that investigators, who did not learn this until recently, say interests them very much.

On the day Ms. Stewart sold her ImClone shares, she has said, she spoke to Mr. Bacanovic, then left a message for Mr. Waksal.

Many are inclined to believe the worst about her, but her friends shrug off reports of her harder edge as inevitable.

"Well, you can't be like Mother Teresa and run a huge company like that," Richard Feigen, an art dealer who has been a friend for 15 years, said. "I've watched her, and she's a tremendous administrator. But you can't be one of those smiley faces all over the place when you are this busy. I don't know of any successful businesswoman who has this smiley-little-thing-in-lace image."

Her peers in the media world, however, say that she has not stored up enough goodwill for them to stand by her through this crisis. "People are more than happy to see her end up as a whiffle ball for New York media to swat around," one publishing executive said.

So far, Ms. Stewart is better known for business than philanthropy. To celebrate the 10th anniversary of her magazine, Martha Stewart Living, a spokeswoman said the company had donated $300,000 to charities. Her office said she also made cash contributions out of her own pocket to National Public Radio and public television. The amounts were not disclosed.

Only months ago, it was Kmart, mired in bankruptcy proceedings, that badly needed to hang on to Martha Stewart's product line and seal of approval. The tables seem to have turned. James B. Adamson, Kmart's chairman and chief executive, lent his support on Friday to his company's muse.

"While it would be inappropriate for us to comment on Martha's personal matters," he said, "she is a valued partner and her product continues to do well in our stores, in fact far better than the company trend."

Even before her ImClone trade became an issue, Ms. Stewart's own company recognized that it needed to back away a bit from the Stewart personality cult. Her television shows are beginning to introduce other hosts, like Darcy Miller, the company's weddings editor, and plans call for programs that will "evolve the brands from dependence on Martha," a spokeswoman said.

Meanwhile, that brand, attached to her name, "halos all we do," said Susan Magrino, the company spokeswoman.

By last week's end, there were a few signs of a backlash against the media's own Marthafest, at least among columnists writing on Friday in the editorial pages of The Wall Street Journal and The New York Post. Those supporters not only suggest that too much scrutiny of Martha Stewart would undermine the American way of life, but also complain that the criticism of Martha Stewart is sexist.

They echo a complaint Ms. Stewart often lodged before the ImClone scandal came to light.

"I think sometimes coming out of a woman's mouth, business talk sounds — maybe it does sound a little tough," Ms. Stewart told Larry King on CNN when he interviewed her last year. "I think it's still — there's still a little bit of inequality at the top."

[georgym]

i can't wait to see what happens with this