New York ? It won’t be business as usual when Martha Stewart makes the transition this weekend from prisoner to multimedia empress.

Known for her tough management style before prison, Stewart will need to show a sweeter side as she returns to Martha Stewart Living Omnimedia Inc., which has been demoralized by layoffs and sales declines since her legal troubles surfaced in the media almost three years ago, industry observers say.

Stewart, who abdicated her chairman and chief executive titles following her 2003 indictment in a stock scandal, simply will be known as founder when she resumes work Monday after serving five months in a West Virginia prison for her felony conviction. Her case is on appeal.

She’ll resume writing her monthly column, star in two TV shows — a revival of her homemaking show, and her own version of “The Apprentice” — and get back to being the visionary of her public company. She even will start drawing again on her $900,000-a-year salary, while serving five months of home confinement at her Bedford, N.Y., estate.

But work relationships may be tested. Stewart faces a crop of new faces, including Chief Executive and President Susan Lyne, who replaced longtime confidante Sharon Patrick last November. Lyne, a former television programming executive, already has been making executive changes.

There are even rumblings that Stewart wants to eventually reclaim her chief executive title.

From left are Jeff Zucker, president of NBC Universal Television Group; Susan Lyne, president and CEO of Martha Stewart Living Omnimedia Inc.; and producer Mark Burnett -- the team bringing a reformed Stewart to the small screen. Stewart is expected to waste no time jumping back into her multimedia empire after she is released from prison today.

“Martha Stewart just can’t walk back in, and take over as if she has been there for the last three years,” said Brendan Burnett-Stohner, vice chairwoman of Christian & Timbers, an executive recruiting company in New York. “She needs to prove that she is a better person, humbled and can re-earn their respect.”

Investors, counting on a positive bounce from Stewart’s return, have bid up her company’s stock to triple the level it was when she was convicted March 5, 2004. The stock is trading near the high end of its 52-week range of $8.25 to $37.45 per share on the New York Stock Exchange.

Still, the company is struggling. Last week, Martha Stewart Living reported a fourth-quarter loss of $7.3 million, compared with a profit of $2.4 million a year earlier — reflecting continued declining magazine advertising revenues and the hiatus of its syndicated daily cooking show starring Stewart. Total revenues fell 15 percent to $60.2 million.