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Crisis Management Expert David Margulies Says Martha Stewart's Damage Control Efforts Fall Short

DALLAS, March 6, 2013 /PRNewswire/ --  An expert in litigation media relations and crisis management says the current trial involving Martha Stewart, J.C. Penney and Macy's could seriously damage the value of the Martha Stewart brand.

"Stewart has once again tarnished her brand with what many will view as unethical conduct," said crisis management expert David Margulies. "Even if the court rules in her favor the perception will be that Stewart stabbed a longtime loyal business partner in the back."

"The public looks at legal issues from a point of fairness rather than from the specific legal issues involved," said Margulies. "When dealing with the media on legal issues we try to state our client's position based on what key stakeholders will believe is fair and ethical conduct."        

Stewart has been critical of Macy's CEO Terry Lundgren for hanging up on her when she was describing her agreement with J.C. Penney. Stewart testified, "I was quite taken back by his response and when he hung up on me I was quite flabbergasted."

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

"The litigation has resulted in damaging news stories concerning the poor performance of her company Martha Stewart Living Omnimedia, and has brought additional negative publicity for J.C. Penney at the worst possible time," said Margulies.

"In my book, Crisis Management in the Internet Age, we strongly recommend organizations 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 should be taking special care to protect her image because of a previous conviction and prison sentence in 2004 for making false statements and obstruction of justice," said Margulies.  "Stewart continues to act as someone who believes they have a special sense of entitlement."

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