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Good things galore from Martha Stewart

The domestic diva is poised for a comeback, with her brand expanding far beyond Kmart.

By Mark Albright , On Retail
Published October 24, 2007

Macy's Martha Stewart Collection, shown above at St. Petersburg's Tyrone Square Mall, includes 2,000 home products.
	[Dirk Shadd | Times]

ADVERTISEMENT [Getty Images] Stewart tours her line of houses by KB Home in the Twin Lakes Community in Cary, N.C., in 2005. [Dirk Shadd | Times] Macy's expects the Martha Stewart Collection to generate sales of $400-million annually. While Macy's and Kmart cater to different customers, one analyst says too many products overlap.

Have shoppers forgiven Martha Stewart for her insider trading sins? We're about to find out.

With a heap of help from eager home goods marketers, the queen of the domestic arts is about to be everywhere.

Her Martha Stewart Living Omnimedia has signed 15 licensed product deals - nine in the past year - aimed at taking her trusted taste far beyond the discount aisle at Kmart.

While speculation simmers about whether Kmart, which provides Stewart's company 80 percent of its royalty income, will renew their relationship beyond the current January 2010 expiration, Stewart has been expanding elsewhere. She has 2,000 home products at Macy's, a crafts line for 900 Michael's stores and prepared foods coming to Costco, the wholesale membership club. That's on top of her paint deal with Lowe's Inc., photo/stationery products from Kodak and flower arrangements sold at 1-800-Flowers.com.

Still to come: Martha's limited-edition wines made by E.&J. Gallo Winery and her version of a Florida KB Homes community in Ormond Beach.

Retailers' research shows Stewart, 66, ripe for a comeback two years after her well-chronicled five-month sentence ended in a rural West Virginia prison.

But merchants are even more enthused that Stewart is highly visible again on media she controls. She's back spreading household tips on national television 10 a.m. daily on WFTS-Ch. 28 locally, plus her radio and cable network shows. Her Martha Stewart Living magazine has distribution of 1.7-million copies and she has a new book deal.

Stewart controls the company but, in an SEC settlement last year, agreed not to serve as an officer or director for five years. She is counting on the deals to make her company profitable for the first full year after losing $155-million in the past four.

Despite the tarnish, the Martha Stewart name remains far ahead of any home furnishing brand built around a designer or taste arbiter.

She ranks 20th, between Hoover and Sunbeam, in popularity among the top 50 home product brands, according to a survey released last month by HFN, a trade journal. The closest designer rivals: Calvin Klein and Ralph Lauren, who came in 29th and 41st, respectively. Rachael Ray came in 125th.

"It's amazing how quickly people forgave a convicted felon once she stopped denying everything and just got on with her life," said Britt Beemer, whose market research firm specializes in home furnishings. "Her customers say she made a mistake and paid for it. More important, I don't think anybody knows what the American female wants more than her company."

Celebrity products are really more about quality, pricing and look of the goods, not the celeb's broadcast popularity. I recall talking to female Kmart customers when Stewart was sentenced. Most said she was railroaded because she was a strong female. She may have lied about insider trading in a pharmaceutical stock, but they still trust her taste not to be conflicted by cash.

And she's closer to a household name than media-created rivals Chris Madden, Nate Berkus and Christopher Lowell.

Still, consultant Kelly Tackett with TNS Retail Forward says Stewart risks overexposure renting her name to so many, even if the idea is to prepare for an end to the Kmart relationship that is slated to expire in two years, when Stewart is 68.

At Kmart, sales of Martha Stewart Everyday products - still more than $800-million - declined the past two years faster than Kmart's overall sales on a comparable store basis. Kmart this fall redesigned its Stewart textile lines, but added Abbey Hill, a store label of its own. The discounter is not saying if it plans to renew its deal, but already sued once over royalty payments, including a requirement Kmart buy ads for her brands in her magazines.

"I think Martha would leave Kmart tomorrow if she could," said Candace Corlett, a principal with WSL Strategic Retail. "But nobody covers the retail lifestyle universe like Martha does. And the Kmart customer doesn't walk through Macy's that often."

Macy's hopes its Martha Stewart lines grow to $400-million a year. But it's going to take more than a familiar name. Only 9 percent of shoppers say they are influenced by designer names for home goods, according to TNS Retail Forward.

"The proliferation of celebrity designer and foodie names means more to retailers than to consumers," Corlett said. "Unless there's product differentiation, she's overbranded."

Many of Macy's and Kmart products overlap, she says.

"That's not a good thing."

Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

Martha Stewart everywhere?

The Stewart brand has been licensed to these companies:

- Kmart

- Macy's

- Michael's

- Costco (foods)

- Bernhard Furniture Co.

- 1-800-Flowers.com

- E.&J. Gallo Winery

- Eastman Kodak (stationery)

- FLOR (carpet tile)

- Generation Brands (lighting)

- Lowe's Inc. (paint)

- Safavieh Inc. (area rugs)

- Sears Canada

- KB Home

- Waterford Wedgewood (crystal, china, flatware)

Source: TNS Retail Forward

[Last modified October 23, 2007, 22:39:13]