Get-Out-Of-Jail Day For Martha

It's get-out-of jail day for Martha Stewart, who has completed a five-month stint at a federal prison for women in Alderson, West Virginia, for her felony conviction of lying to federal investigators looking into a stock sale.

Stewart was released from prison shortly after midnight and according to her company, Martha Stewart Living Omnimedia, she will be flying home to New York via private jet.

The lifestyle guru does not plan to make any comments on her way home but she does intend to post a written statement at MarthaStewart.com. Her corporate site also talks about what's next for Stewart: five months of home detention, with an electronic anklet keeping authorities informed of her movements. Under the terms of her confinement, she will also be allowed to leave her home for her job, for as many as 48 hours a week.

Stewart left prison at 12:30 a.m Friday in a two-vehicle motorcade and headed to a nearby airport where she was to board a private jet for a flight to New York. She will spend the next five months in home confinement at her 153-acre estate in Katonah, N.Y.

A sport utility vehicle carrying Stewart drove through the prison gate past reporters and about 15 fans without stopping. About a 1/2 mile from the prison a cardboard sign said, "Goodbye Martha. From fans and friends in Alderson, W.Va."

Keith Bennett braved the 16-degree temperature to see Stewart leave.

"I don't care about any of her stuff at Kmart or her flowers, I just think she's hot for her age," said Bennett, 43, of nearby Ronceverte.

Stewart, 63, has 72 hours after leaving Alderson to report to corrections officials in New York to be fitted with an electronic ankle bracelet so her movements can be monitored.

Some Stewart supporters flew to Alderson to be there for her exit from prison. Linda Blaney, who lives in the Seattle area, flew to West Virginia with friends to display a Stewart brand floral sheet bearing the signatures of Stewart supporters.

"We want to make sure she knows we were there and let her know we support her," said Blaney. "This would not have happened to someone else. They
slam-dunked her because of who she is."

Stewart isn't the first celebrity inmate for the nearly 80-year-old prison, which was briefly home to Billie Holiday, Tokyo Rose, Axis Sally and presidential assailants Lynette "Squeaky" Fromme and Sara Jane Moore.

But the town of Alderson, which has made a fair amount of money since Stewart checked in as an inmate, won't be quite the same without her.

"Every business in town profited," says Betty Alderson, whose husband is descended from the family that founded the town. Alderson's Store sold over 1,300 "West Virginia Living, It's A Good Thing" T-shirts at $17 each and has printed up new T-shirts and mugs for Stewart's farewell, reading: "I Spent Time In Alderson, W. Va."

Residents are also planting over a thousand bulbs which will be planted in a spot to be called "Martha's Garden."

Stewart meanwhile has a big transition to make settling back into more comfortable digs and the challenging job of resuming the reins in her business empire.

Known for her tough management style before prison, Stewart will need to show a sweeter side as she returns to Martha Stewart Living Omnimedia Inc., which has been demoralized by layoffs and sales declines since her legal troubles surfaced in the media almost three years ago, industry observers say.

Stewart, who abdicated her chairman and chief executive titles following her 2003 indictment in a stock scandal, will simply be known as founder when she resumes work Monday after serving five months in a West Virginia prison for her felony conviction. Her case is on appeal.

She'll resume writing her monthly column, star in two TV shows — a revival of her homemaking show, and her own version of "The Apprentice" — and get back to being the visionary of her public company. She will even start drawing again on her $900,000-a-year salary, while serving five months of home confinement at her Bedford, N.Y., estate.

But work relationships may be tested. Stewart faces a crop of new faces, including Chief Executive and President Susan Lyne, who replaced longtime confidante Sharon Patrick last November. Lyne, a former television programming executive, already has been making executive changes of her own.

There are even rumblings that Stewart wants to eventually reclaim her chief executive title.

"Martha Stewart just can't walk back in, and take over as if she has been there for the last three years," said Brendan Burnett-Stohner, vice chair of Christian & Timbers, an executive recruiting company in New York. "She needs to prove that she is a better person, humbled and can re-earn their respect."

Karen Harvey, principal of an executive search firm that bears her name, said Stewart will have to "really listen, and really walk the floors."

Newsweek magazine senior writer Charles Gasparino told The Early Show co-anchor Harry Smith that Stewart's situation is a bit sticky.

While at the Wall Street Journal, Gasparino first broke the story of Stewart's stock scandal, and recently at Newsweek, he broke the story that the SEC is working out a deal, which would allow her to return to her CEO position in five years or less.

"It's good for Martha," Gasparino says, "She gets back into the company, running the company, which I believe she wants to do, and it's good for the SEC because they can make an insider trading law a lot broader if they want."

Generally, the SEC bans people convicted of a felony from performing the duties of CEO. Martha is currently facing civil insider-trading charges filed by the SEC. These are different from the criminal charges that led to her prison sentence. If the civil charges are upheld, she will not be allowed to become CEO.

"There is no specific law that says this is insider trading," Gasparino notes. "By getting into this settlement, you create more precedent and that's what they're doing."

Stewart has won plenty of sympathy from outsiders. To clear the cloud of uncertainty hanging over her company, she went to prison rather than waiting for her appeal's outcome.

Investors, counting on a positive bounce from Stewart's return, have bid up her company's stock to triple the level it was when she was convicted on March 5, 2004. The stock is trading near the high end of its 52-week range of $8.25 to $37.45 per share on the New York Stock Exchange.

Still, the company is struggling. Last week, Martha Stewart Living reported a fourth-quarter loss of $7.3 million, compared with a profit of $2.4 million a year earlier — reflecting continued declining magazine advertising revenues and the hiatus of its syndicated daily cooking show starring Stewart. Total revenues fell 15 percent to $60.2 million.

The company also forecast a first-quarter loss that's wider than many analysts expected.

The bright spot is that the flagship magazine Martha Stewart Living — which accounted for about one-third of overall revenues last year - is slated to post positive revenue and ad page growth in the second quarter.

In a recent interview with The Associated Press, Lyne said Stewart's experience and creativity will help the company anticipate trends among female buyers.

Stewart will spend at least half her time on TV projects with reality TV guru Mark Burnett, which will enhance the brand, Lyne said. Burnett will receive company stock options that, based on current prices, are already worth upward of $48 million.

The company's warm embrace of Stewart may appear at odds with its recent moves to de-emphasize her name, expanding into titles like Everyday Food and shrinking Stewart's name on the masthead of Martha Stewart Living.

But Lyne has told investors the company never backed away from the brand, and that "the Martha Stewart brand has always been, and remains, our greatest asset."