Martha Stewart's (search) media and merchandising company said Wednesday it plans to expand its furniture line amid strong demand from consumers.

The New York company's merchandising operations, mainly fueled by Kmart sales, have held up well compared with its magazine and television divisions, which have been reeling since Stewart's name became tainted by a stock trading scandal.

Sharon Patrick, chief executive of Martha Stewart Living Omnimedia Inc. (MSO), said in an interview that the furniture expansion is an example of how the company has been able to move forward, despite the personal legal travails of its namesake founder.

"It was launched during a difficult period, found an audience during a difficult period and has shown growth," she said.

Stewart was convicted in March for lying to investigators looking into her 2001 sale of stock of ImClone Systems Inc. (IMCL), a biopharmaceutical company. She began serving a five-month sentence on Friday.

Martha Stewart Living and Bernhardt Furniture Co. (search) , a closely held furniture maker in Lenoir, N.C., plan to add 43 new furniture items to their existing line. The new items will be available at furniture retailers nationwide, beginning in March 2005.

Consumer reaction to the three collections launched so far "continues to be extremely favorable," according to Alex Bernhardt Sr., chairman and chief executive of Bernhardt Furniture.

Shares of Martha Stewart Living were at $15.91, down 14 cents, or about 1 percent, on the New York Stock Exchange (search).