UPDATED: Shares fell as much as 9.7% in early trading after Martha Stewart Living Omnimedia said that Lisa Gersh — who just became CEO of the domestic diva’s media company in July – “plans to step down from that role” as directors begin to search for a successor. The former Oxygen Media exec had been president and chief operating officer at Stewart’s company since 2011 and was expected to beef up its TV programming after Hallmark Channel decided early this year not to renew The Martha Stewart Show. As you might expect, execs say that all’s well. “With the restructuring of the media businesses complete and a strong team leading key financial and corporate functions, the company is on solid footing and positioned for growth,” Gersh says. “There is an exciting future ahead for Martha Stewart Living Omnimedia and I am committed to working with the board to ensure a smooth transition.” Martha Stewart, who’s founder and non-executive chairman, says that the “media businesses are now repositioned for the future and we are excited about the potential of our digital, mobile, video and print platforms.” But investors aren’t so sure. The company’s shares lost 45% of their value over the last 12 months before this morning’s drop. The publishing business slowed; Stewart’s company said this month that it will close Whole Living, a magazine dedicated to healthy eating. JCPenney, which bought a major stake in the company last year, plans to put Martha Stewart shops in some of its stores in 2013 — but Macy’s says it has an exclusive deal for Stewart’s merchandise and sued for breach of contract.

Stewart’s company says that under Gersh it has “successfully restructured and repositioned its publishing and broadcast divisions to improve profitability and expand delivery of its lifestyle offerings through digital, mobile and video platforms.” That will result in annual cost savings of as much as $47M, and improve cash flow by as much as $7M a year.

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