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Martha Stewart Living Omnimedia reported that it expects to lose between seven million and nine million dollars this year, a greater loss than originally expected and a major change from its 2003 profit performance.

The company's second-quarter profit plunged 86 percent, to $931,000, from $6.7 million a year earlier. Revenue fell to $65.8 million from $78.6 million.

Analysts say that the decline is a clear indication that Stewart's personal legal problems - she is under indictment because of obstruction of justice charges related to alleged insider stock trading - are having a direct impact on the business that bears her name.

The company said that all areas of its business dealings are being hurt by the scandal.
KC's View:
Yesterday, when Kmart released its quarterly numbers, it said specifically that Stewart's legal problems did not seem to be having an impact on sales. Which would seem to be at odds to some extent with the projections about Stewart's company.

Sure, there are other influences on Stewart's company's performance. But somehow, the two reports don't seem to jibe.

Gee, y'think maybe someone at Kmart is trying to put a pretty face on a situation growing uglier by the day?