Life Without Martha

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At the peak of her company's success, Martha Stewart inadvertently summed up both the strength and vulnerability of the media empire she had built. At an advertising-industry conference in Detroit in 2001, the lifestyle guru was fielding questions from a star-struck audience. "Someone asked her, 'You dispense all this advice—who taught you all these things? Who's your mentor?'" recalls Samir Husni, a magazine consultant who also spoke at the conference. "She said, 'Me. Me. I did it all by myself.'"

That relentless self-reliance helped turn Stewart into a wealthy tycoon. But the future of Martha Stewart Living Omnimedia, the company she founded, will depend on a very different kind of corporate chemistry now that Stewart has been sentenced to serve prison time for conspiracy and obstruction after lying to federal investigators about a stock trade. Standing before Judge Miriam Cedarbaum last week in a courtroom in lower Manhattan, Stewart's voice faltered as she asked for leniency. "My hopes that my life will not be completely destroyed lie entirely in your competent and experienced and merciful hands," she said. Cedarbaum gave her the mildest sentence possible under federal guidelines: five months in a minimum-security federal prison and five months of house arrest. Was Stewart surprised? "Not at all," she said defiantly as she left the courtroom.

Stewart plans to appeal her conviction and remains free on bail. But new Martha Stewart Living Omnimedia CEO Sharon Patrick must now figure out how to move the business forward with the company's iconic founder possibly heading behind bars. In the first quarter this year, sales dropped 23% to $44.5 million and the company suffered a loss of $20 million, so a reinvention of the brand looks increasingly urgent. Among other changes, the company's flagship magazine Martha Stewart Living—which saw ad revenue drop 54% in the first quarter—has already been redesigned and its back page, once occupied by a Stewart essay, is now home to the "Cookie of the Month." Stewart vows to return, assuring supporters, "I'll be back ... I'm used to all kinds of hard work." But biscuits and bravado might not be enough to restore the luster of her tattered brand.