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Federated and Sears Each Champion Home

Carole Sloan -- Home Textiles Today, April 17, 2006

What an interesting month this has been!

Two of the key retail players in home textiles have gone public with major initiatives — and in so many ways, they interlock.

What at first appeared to be separate activities actually has turned out to be an unannounced contest between retailing's two bombastic billionaires: Edward Lampert, chairman of Sears Holdings, and Martha Stewart, the founder of Martha Stewart Living Omnimedia. After much open talk, and a lot more behind the curtain, the specs of the MSLO contract with Kmart would not be tempered in terms of the minimums required — at least for the next two years. That, in Lampert's view, precluded the expansion of the Martha brand to Sears, Kmart's new sibling.

Then, almost as a Eureka thing, along comes Federated with an across the board product, media and publishing alliance with Martha. Whoa!

But don't think Lampert is sitting still. Sears has announced new moves in home, the segment that he has identified as key to forging relationships with the grandchildren of what are considered the typical Sears customers.

Looking first at the Macy's move, there seems to be an admission that consolidating the original five Macy's divisions into one home store unit was more than structural. It's now clear that there have been breaks between the execs and the troops in the smaller communities — this happens in every corporation. But in Macy's, after two years the marketing calendar is not yet merged.

Even more important, it appears both internally and externally that the thrust of the product has been pegged downward — despite the success of the Hotel Collection and the position on some of the floors of the so-called “designer” collections.

Enter Martha. Will the doyenne of all that relates to home entertaining, organization, and gardening be able to bring Macy's out of its home doldrums? And how will the stores execute the program? For some of the stores known to many of us, execute probably is the right word.

Lampert has stated that Sears especially will be homeward bound. Sears must bond with consumers beyond the hard lines — so the company is now launching its version of a hotel look. RTA furniture is next on the list, and more can well be in the wings if Lampert's assessment of home as the key consumer connection for Sears plays out.

The critical issue is not just product, but space in the non-elastic box called a store, as well as execution in terms of sales help, delivery and overall presentation. For the future of both of these retailing giants, stay tuned.

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