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Martha Stewart to re-engage e-commerce, on plan at Macy’s

Las Vegas – E-commerce is back on the board at Martha Stewart Living Omnimedia, but this time with a twist.

During the company’s presentation at the Goldman Sachs Internet Conference here today, MSLO president and ceo Susan Lyne said the company is preparing to embark in 2009 on “very different e-commerce content that we had before.

“On our old site we did the manufacturing, we held the inventory, the products were great, and we lost an enormous amount of money,” she explained. “It’s not what we are good at.”

But by next year the plan is be able to sell “or at least make consumers believe they are buying on our site” when in fact MSLO will be working with what Lyne described as “a middleman partner.”

“What we are looking to do going forward is to essentially be the front end, the interface for consumers,” she said.

Currently, visitors to www.marthastewart.com come “mostly for content, interestingly,” she explained. They can view Martha Stewart-branded products but they can’t buy them. The site allows users to connect to www.macys.com or www.kmart.com to shop for the home guru’s wares.

Other soon-to-come new developments from MSLO include a stronger presentation of luxury or better priced items at Macy’s – an unexpected shift that has come in response to consumers’ unforeseen demands for the brand’s higher bracket assortments at the department store.

“Overall, we are very much on plan with Macy’s despite this downturn in the economy, and we’ve had some surprises, one of them being [the success of] our luxury or best product, which initially Macy’s didn’t think we would be able to play in,” Lyne said. “But it turns out we fill out in our best , and that’s because people understand the value proposition -- what you can get for $199 from us looks like it would be $400 at Bergdorf’s.”

For this reason, the company is branching out “that part of our business pretty dramatically, and it’s more surprising even because we were known as a mass manufacturing line. To be able to play at that very high level is nice.”

MSLO is also growing other aspects of its 2,000-sku, $3-to-$600 Macy’s home program, which launched in September. It is looking to soon add new categories, such as storage, gifts and more home décor pieces.

By staying focused “within our core” home area, and not in unrelated businesses “like fragrances,” and others, she sampled, “there are areas where we can build this [Macy’s program] pretty dramatically,” Lyne said.

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