- Incarceration has worked a miracle on Martha Stewart's
bottom line, restoring the disgraced domestic diva to billionaire status.
She has watched her fortunes soar while serving a five-month jail sentence,
during which she was forbidden by law to conduct any business.
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- The 63-year-old homemaking queen will emerge from prison
on March 6 more than $500 million (£264 million) richer on paper,
after shares in her retail and publishing company soared on the back of
a new reality television deal and higher licensing fees.
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- Shares in Martha Stewart Living Omnimedia slumped as
low as $8.25 in May, as she awaited sentencing after her conviction for
lying to investigators about a personal stock deal. That prompted headlines
such as "Martha Inc can't survive".
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- Last Friday, however, the shares closed at $34.99, valuing
the company at $1.74 billion. Stewart owns just less than 60 per cent,
giving her a stake of about $1.02 billion. Goldman Sachs, the securities
giant, has become its biggest institutional shareholder, with a seven per
cent stake.
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- On her release from jail, Stewart will spend another
five months under house arrest at her new mansion in upstate New York,
although under the terms of her probation she can leave the house to work.
Plenty is lined up, most notably her own version of The Apprentice, a reality
television contest for budding tycoons originally hosted by Donald Trump,
the property mogul.
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- "This country is all about second chances,"
said Mark Burnett, the programme's producer, who also plans a daily live-audience
show with Stewart for NBC in the autumn. "That's what makes it the
greatest country in the world. People love redemption stories."
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- Executives at her company told the New York Times that
licensing fees for the daytime show were "trending significantly higher"
than those for Stewart's original show, Martha Stewart Living, when her
popularity was at its peak.
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- Stewart's downfall came after she lied about why she
sold shares in ImClone Systems in 2001, just before the price plunged.
Her reputation had been that of a shrewd businesswoman who wrote off even
her coffee as a business expense.
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- Before entering prison Stewart appointed her daughter,
Alexis, to run her stake in the company and swapped her roles as director
and chief creative officer to be "founding editorial director".
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- Like all American inmates, she was not able to conduct
business from Alderson, West Virginia, a low-security institution nicknamed
Camp Cupcake in her honour. As a result there was some surprise this month
when Mr Trump, who turned The Apprentice into a ratings hit with his catch
phrase, "You're fired", said that Stewart would be hosting an
offshoot.
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- The star has received monthly visits at Alderson from
Mr Burnett but he insists that the deal was completed before she entered
prison.
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- "Mark and I have always admired her," said
Mr Trump. "She's a very brave woman. She's built a multi-million-dollar
empire. We think this will be an absolutely tremendous success." Stewart
is also expected to turn her prison memoir into a book that literary agents
predict could earn a further $5 million.
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- Even so, the picture at her financial empire is not entirely
rosy. Scores of employees have lost their jobs and merchandise sales of
furnishings, linen and houseware, mainly in Kmart stores, have fallen.
The company is expected to post a loss for 2004. Analysts also express
concern over the flagship Martha Stewart Living magazine, where advertising
revenues are poor. Nonetheless, they agree that the company had turned
a corner that few predicted last summer.
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- Famously high-maintenance, Stewart prompted derision
after her sentencing when she said that Nelson Mandela, who spent 27 years
in jail in apartheid South Africa, would serve as her model for coping
with prison.
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- She has since developed a close interest in penal policy,
sending e-mails to the Wall Street Journal criticising a controversial
change in judicial sentencing rules. She has also expressed concern about
the diet of fellow inmates, persuading the prison authorities to stock
fresh yoghurt alongside chocolate bars in the vending machines, according
to her friend Barbara Walters, the television interviewer.
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- Ms Walters, who visited her recently, said Stewart had
lost 20lb, was in "good spirits", had made friends with prisoners
and taught yoga classes.
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- Less flattering versions of her time inside have emerged
in letters sent to a New York tabloid newspaper by inmates. One claimed
that Stewart had been disciplined for smuggling food from the kitchen in
her underwear so she could spice up meals she prepared for herself in a
microwave.
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- Stewart will make a fresh start at her home in Bedford,
New York. Her priority, she has told friends, is to plant her spring garden.
Resurrecting her public image and reviving her brand will not be far behind.
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- © Copyright of Telegraph Group Limited 2005.
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- http://www.telegraph.co.uk/news/main.jhtml.html
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