Home Depot, Macy's sales help MSLO merch reach ‘critical mass'

Company could return to Kmart-level sales generation this year

Retail Editor 4, February 16, 2011

New York - Martha Stewart Living Omnimedia Inc. said its merchandising business turned the page in 2010, achieving "critical mass" by yearend thanks largely to strong performances of products sold at The Home Depot and Macy's.

During the company's fourth quarter and fiscal 2010 conference call today, president and ceo of merchandising Robin Marino said last year "was a development year for us as we ramped up our merchandising and design staff to support new initiatives like Home Depot and pets."

MSLO's merchandising revenues were $11.6 million for the fourth quarter of 2010, as compared to $25.7 million in the same period in the prior year. Excluding 2009 4Q Kmart revenues of $16.8 million - the program ended in late 2009 - revenues increased 31% on a year-over-year basis in the fourth quarter.

"These results tell an important story about where we are pointing our merchandising business," Marino continued.

Sales of products for MSLO's four leading merchandising partnerships - Martha Stewart Living at the Home Depot, Martha Stewart Collection at Macy's, Martha Stewart Pets at Petsmart, and Martha Stewart Crafts, along with the Emeril business - generated $750 million at retail in 2010.

At its height, the Martha Stewart Everyday program at Kmart generated nearly $1 billion in retail sales.

MSLO ended the year with about 20 merchandising partnerships across multiple product categories for the Martha Stewart and Emeril brands,

The company anticipates 2011 sales at retail through the four leading merchandising relationships plus Emeril could exceed $1 billion, which along with the balance of the portfolio "would translate to healthy growth in our royalty stream over 2010 levels," she continued.

The Home Depot relationship, which embarked 12 months ago with 13 hard lines categories and carpet, "is already the largest sales generator in our merchandising portfolio," Marino noted.

The newest category - the holiday decorating assortment - had strong sell-throughs in the fourth quarter, and the carpet program continues to perform well. MSLO has plans to expand into new categories throughout 2011.

At Macy's, the Martha Stewart Collection "continues the number one brand in the home store," Marino said. "This holiday season was extremely successful for us across our entire business, especially soft home textiles.
Same store sales showed double digit increases compared to the prior year's quarter, with particularly strong sales online through macys.com."

For fiscal 2010, total revenues - which include publishing and broadcasting - fell 5.7% to $230.8 million. Included in the results was $24.5 million revenue from Kmart in 2009 and $1.2 million revenue from Kmart in 2010.


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