Why They're Picking on Martha Stewart

Prosecutors charge Martha Stewart with fraud and conspiracy--and say they're sending a message to other CEOs

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Stewart stepped down as CEO hours after the indictment was announced, but a company representative says her new title, "chief creative officer," only reflects what she has always done in shaping the Martha Stewart television shows, magazine and home products. "It's business as usual," the representative says. Stewart will continue to appear on the TV shows, and the magazine will continue to be animated with scenes from her carefully crafted life of gracious country glamour. At least one expert on branding suggests that this is the opposite of what the company should be doing--steering Martha Stewart the company away from Martha Stewart the person. "Her face time has got to be cut down," says Donny Deutsch, CEO of Deutsch Inc., part of the Interpublic advertising agency. But Stewart, as usual, is following her own course. The day after her indictment, she took out a full-page ad in USA Today proclaiming her innocence and launched a website, Marthatalks.com where supporters are encouraged to send her e-mail messages. Argenti, now a professor at Dartmouth's Tuck School of Business, says this is where Stewart excels: "She is a master at communicating with one constituency--her customers." She will now have to try her hand with another one--a jury. --With reporting by Michael Weisskopf/Washington

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