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Business as usual for Martha

New York — After Martha Stewart Living Omnimedia (MSLO) chairman of the board and ceo Martha Stewart commenced the second quarter conference call by requesting that all media and investor questions focus on the earnings report and not on her ongoing federal investigation, updates on its merchandising and retail segments became the major focus of the meeting.

The company reported second-quarter revenues in the merchandising segment increased 82 percent to $16 million, due in part to higher royalty rates under MSLO's revised contract with Kmart, the introduction of new products in the Signature line, and certain timing issues related to royalties earned from the sale of garden products at Kmart resulting from the revised contract.

Regarding Shaw Rugs' much anticipated product launch for a licensed area rugs line, Sharon Patrick, president and coo, noted that while some product licensee partners have understandably shown concern over the impact Stewart's federal investigation has had on consumer confidence, "[Shaw's] trucks with product are rolling this week for the fall launch in September and October. We expect, based on the high consumer demand, that we'll have a very positive response."

Other merchandising-related initiatives taking place during the third and fourth quarter include the restructuring of the brand and catalog program to help, among other things, cater to a top-tier consumer demographic; the expected rollout of more Martha Stewart retail stores in Japan this fall based on the large success of the current single unit in Tokyo; and the new contract between Martha Stewart and Sears Canada to sell Stewart's products exclusively to the Canadian market once the company's current contract with Zellers expires at the end of the year.

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