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At Kmart, Martha Stewart sales down, royalties up

New York – Driven by contractual minimum royalty guarantees, Kmart paid Martha Stewart Living Omnimedia (MSLO) $28.0 million in the fourth quarter of 2005, up from $23.7 in the same period a year ago. Sales of Martha Stewart Everyday products, however, “declined modestly in the quarter, with weakness in soft home partially offset by sales related to our recently introduced furniture line – Everyday Rooms,” the company said in its earnings release.

For the full year, MSLO merchandising royalty revenue reached $55.8 million, up 4.6%. Operating income from the division was $40.1 million, up 8.1%. This licensing venture was the only profitable unit of the four MSLO divisions in 2005; the other segments are publishing, broadcasting and internet/direct commerce.

Susan Lyne, president and ceo, noted that in contrast to the full year, the fourth quarter results “show meaningful improvement in all areas of our business.”