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Martha Stewart Drives to Bridge $45 Million Gap

Kmart's Martha Stewart Everyday program churned $800 million in sales in 2006, said Susan Lyne, president and ceo of Martha Stewart Living Omnimedia (MSLO) at the UBS 35th annual Global Media Conference here.

MSLO's Kmart contract runs through January 2010 “and remains a strong component of our business,” Lyne said, if anything understating the weight of the big wheel in MSLO's merchandising revenue flow.

“We've been getting guarantees from Kmart for our licensing business,” she went on to say. “They ramped over time to about $65 million this year. They [the guarantees] go down to $20 million next year, or royalties based on goods sold — whichever is highest. That [approximately $45 million] gap is what we have been looking to close with all of these new merchandising partnerships.”

With lines at Lowe's, Costco and other retailers, she said it is “very important to us to diversify our product lines and our channels of distribution.” Sales figures for the Martha Stewart Collection of 2,000 skus launched in September at Macy's have not been made available yet by either MSLO or the retailer.

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