• by Paul Gough , October 30, 2003

It isn't just the offline world where Martha Stewart Living Omnimedia is having trouble.

Stewart's legal woes are well known, as are the effects of her upcoming trial on charges of obstructing justice in a stock-trading investigation. The New York-based company disclosed today that it lost $3.8 million in the third quarter, compared to a gain of $2.8 million a year ago. Revenues dropped 27.8 percent overall.

The fall in revenues, which the company has tied to the problems its namesake is having, was particularly pronounced in publishing. Revenues fell 37.3 percent to $29.1 million on a loss of advertising. But the company's Internet and direct commerce business, which the company had high hopes for before the bust, saw revenues fall 17.4 percent to $6.6 million in the third quarter compared to the same period a year ago.

The company blamed lower advertising revenues and product sales, not only for marthastewart.com but also its Martha By Mail catalog. The company has reduced its loss, however, because of its efforts in lowering circulation on the unprofitable catalog business.

-- Paul J. Gough