Expert: Ongoing trial could seriously tarnish Martha Stewart brand

Dallas -- The current trial involving Martha Stewart, J.C. Penney Co. and Macy's could seriously damage the value of the Martha Stewart brand, according to litigation media relations and crisis management expert David Margulies, president of Marguilies Communications Group.



"Even if the court rules in her favor the perception will be that Stewart stabbed a longtime loyal business partner in the back,” he said. “The public looks at legal issues from a point of fairness rather than from the specific legal issues involved.”



Stewart has been critical of Macy's CEO Terry Lundgren for hanging up on her when she was describing her agreement with Penney.



"I was quite taken back by his response and when he hung up on me I was quite flabbergasted,” Stewart testified in court.



However, Marguilies said, “Lundgren did what any experienced CEO would do when he was alerted to a situation that was likely to lead to litigation. He ended the conversation without making any comment that would jeopardize his company's legal position."



Marguilies said the current litigation has not only resulted in damaging news stories concerning the poor performance of Martha Stewart Living Omnimedia, but also brought additional negative publicity for Penney “at the worst possible time.”



Marguilies is author of the book, “Crisis Management in the Internet Age,” in which he recommends companies establish the role of a devil's advocate to push back against decisions that can lead to this type of litigation and negative publicity.



"Stewart continues to act as someone who believes they have a special sense of entitlement,” Margulies said.