One might guess that today would be a gloomy day for Martha Stewart Living Omnimedia (NYSE:MSO) shareholders, as a U.S. District Court judge sentenced the company's founder and namesake to five months in prison.
Instead, the stock is surging, probably because investors are pleased that the home lifestyle queen's sentence was lighter than expected. Nevertheless, jail time, however short, is hardly a plus for a person's reputation. Martha Stewart, ex-con, likely will have very little chance of reclaiming her status as an entertainment icon. In fact, even if she manages to overturn the charges against her in the appeals process, Martha Stewart's revival seems doubtful.
At this point, though, the fate of Martha Stewart the individual may not matter so much. The fact is, even before the company went public in 1999, Martha Stewart Living was well on its way to transcending its founder, with branded goods in a myriad of categories, including bed and bath, paint, and garden tools. Consumers of these products likely take Martha Stewart the person into consideration in their buying decisions about as much as Ralph Lauren (NYSE:RL) customers ponder that company's namesake -- very little. As Martha Stewart no doubt had hoped, Martha Stewart the brand has taken on a life of its own. The Queen is dead; long live the Queen.
As the scandal continues to recede, Martha Stewart Living has a good shot at a revival, perhaps as a smaller, less-proud version of its former self. Indeed, in the merchandise area at least, the signs are hopeful, especially since Kmart Holding (NASDAQ:KMRT) has pledged that it will stand behind the brand. Perhaps most importantly, Martha Stewart Living has the financial wherewithal to weather the storm.
Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.
