Martha Stewart merchandise sales up smartly

By Staff -- Home Textiles Today, 7/29/2008 2:37:00 PM

New York – With its merchandising segment posting a “proud” 57% revenue gain year over year during the second quarter, Martha Stewart Living Omnimedia Inc. said it is on the brink of expanding its branded product reach internationally.

“We see continued opportunity to grow our merchandising [with MSLO’s current brands] and that’s just in the United States. Now more than ever we’re close to beginning to build an international footprint, so stay tuned,” said Robin Marino, president of merchandising and co-ceo during the company’s quarterly conference call this morning.

She later added, “The international part of our [merchandising] expansion is a large initiative. I recently renewed my passport.”

MSLO has already started on its global initiative, which in the master plan includes “all our business segments,” noted Charles Koppelman, executive chairman of the board. Recently, the company rolled out international editions of its Martha Stewart Living and Everyday Food publications as well as its TV shows, which are broadcast in 71 countries.

“International is about our future,” he said. “Merchandising products will follow closely behind [the publication and TV roll outs]. Right now, it’s a small part of our revenue and a small part of our EBITA [earnings before interest, tax and amortization].”

Feeding MSLO’s fuel to go beyond U.S. borders are the findings from a third-party research the company recently commissioned.

“We found the brand in fantastic and powerful shape and on a solid platform from which to continue to grow the business,” Koppelman said. “Almost 70 million women want to buy Martha Stewart products and want them available everywhere they shop.”

It’s no surprise, then, the company said, that its merchandising segment proved a bright spot during the second quarter ended June 30, with revenues at $16.2 million compared to $10.4 million during the same period last year. Adjusted EBITA for the merchandising segment rose nearly 126% to $8.8 million for the quarter.

Marino said this increase was driven by “strong product sales at Macy's and the expansion of our crafts line into Wal-Mart as well as contributions from Emeril and 1-800-Flowers.com. The Martha Stewart Collection at Macy's witnessed strong sales during the quarter and remains the number one brand on Macy's bridal registry.”

This fall marks the collection’s first anniversary at Macy’s, and still no specific financials on its performance have been released.

Marino only offered that the collection “continues to be among the top sellers in their respective categories and we are extremely pleased with their performance, which has been exceptional considering the economic climate.”

The highlights of the line are the textiles products, including towels and bedding, which “remain very popular with customers.” Also noteworthy were beach towels, which she said have been “especially successful” this summer.

Luxury bedding continues to expand and core programs such as kitchen gadgets are performing strongly, Marino continued.

Total company profit was $328 million, compared to a net loss of $6.7 million in last year’s second quarter. Operating income was $1.7 million vs. an operating loss of $7.8 million in the year-ago period.

Total company sales rose 5% to $77.1 million.