Those who live by the brand die by the brand.

In the wake of convictions for lying about a stock sale and then conspiring to cover it up, Martha Stewart took a big fall off Celebrity Wall last week. Now all the Queen’s ‘identity consultants’ can’t put her brand back together again.

At Martha Stewart Living Omnimedia (MSO), which runs publishing, television and merchandising divisions, revenues, profits and stock value are plummeting. Kmart, the biggest distributor of Martha Stewart home products, wants out of its partnership with MSO.

The retailer recently filed a lawsuit alleging it was overcharged, even as sales at MSO’s merchandising unit dramatically decreased. Meanwhile advertising pages at Martha Stewart Living magazine are in freefall, and ratings of the “Martha Stewart Living” syndicated television show are dropping, with flagship station WCBS-TV canceling the program effective immediately. The New York Times, which distributes the “Ask Martha” column, will decide this week whether or not to be the last rat to jump off Stewart’s sinking ship. And Stewart still faces civil lawsuits filed by disgruntled shareholders, as well as a Securities and Exchange Commission suit accusing her of insider trading.

Martha Stewart Living has become Martha Stewart Dying.

“The brand is completely dead,” asserts Christopher Byron, who literally wrote the book (the bestselling “Martha, Inc.”) about Stewart. “There is zero chance of reviving the product name. It would be the same as having John Gotti bath towels -it’s not going to happen.”

Brand consultant Robert Passikoff echoes Byron’s sentiment, telling the Times, “”Now that she was found guilty, the brand was found guilty.”

In order to live, these experts say, Martha Stewart Living must kill Martha Stewart.

“Will the company survive?” Passikoff asks. “That remains to be seen. The immediate thing for MSO to do is distance the company from Stewart.”

Yet even in death, Martha Stewart may live on. Here’s how: “In a way, Martha is actually in a great position now,” says Byron. “The conventional wisdom is that there is no business here if Martha goes. But as usual, the mainstream media has missed the real story. Even if she’s no longer CEO or even the chief creative officer, Martha still controls the company because she controls the majority of the supervoting stock.”

Thus, says Byron, Stewart will be able “to do something John Gotti always wanted to do - to run her organization from prison.”

Byron suggests that Stewart wait until the stock price falls further, and then use cash that MSO is sitting on to take the company private. “At five dollars a share, she can buy it for $100 million and still have sixty five million left over. Then she gets folds the television division, takes her name off the magazines, and revivifies them to bolster catalogue and merchandising sales.”

Under Byron’s scenario, Martha could do her time, come out in a year or so appearing apologetic and chastened, and then take the company public all over again. “She could be sitting on a billion dollars again in five years,” he concludes.

Executives at MSO have already begun to transition the brand away from Stewart. Some even suggest that Martha Stewart Living Omnimedia will soon choose a completely new name - much as the death-dealing cigarette merchants at Philip Morris now hide behind the more anonymous (and innocuous) sounding Altria corporate identity.

The brand is dead. Long live the brand!