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Martha Stewart drives to bridge $45 million gap    

New York -- Despite Kmart’s recent sales and profit slowdown, its Martha Stewart Everyday program churned $800 million in sales in 2006, said Susan Lyne, president and ceo of Martha Stewart Living Omnimedia (MSLO) during her presentation yesterday at the UBS 35th annual Global Media Conference here.

MSLO’s and Kmart’s agreement continues through January 2010 “and remains a strong component of our business,” Lyne said, understating the power of what is still a strong contributor to Kmart’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.”

Walking analysts through a tour of MSLO merchandising exclusives with Lowe’s, Costco and other retailers, she said it is “very important to us to diversify our product lines and our channels of distribution – this is really the future for the company.”

Sales figures stemming from September launch of the “most significant” new program, the Martha Stewart Collection of 2,000 home-related skus at Macy’s, have not been made available yet by either company. But early indicators, Lyne said, are “very, very encouraging. It’s been a fantastic launch.”

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