Martha to seek mass market partners after Kmart

-- Home Textiles Today, 3/12/2008 2:18:00 PM

New York – Addressing her second analyst conference in as many days, Martha Stewart Living Omnimedia’s chief elaborated a bit yesterday on her March 10 assertion the brand would live on in the mass market after its exclusive contract with Kmart expires in January 2010.

“Right now we do not believe Kmart is our likely partner going forward,” president and ceo Susan Lyne said during the Bank of America 2008 Consumer Conference here. “However, as of January 2010 we can be in any other mass retailer,” and the company is free to pursue new deals now, she added.

Lyne noted that its other channel exclusives are with first-in-class retailers (Lowe’s, Macy’s and Costco) and indicated the company believes it will receive more floor space and better promotion if it signs another exclusive in the mass market.

She did caution against expecting another Kmart-sized contract, which spans multiple product categories and in its heyday approached $1 billion in annual sales.

“That was a landmark deal,” she said of the Kmart agreement, noting it was the first of its kind.

As for a new mass market partner, “What is important for us is to be with someone who is investing in their business,” she said.

Although Kmart’s obligations have begun winding down, the retailer still accounts for 80% of Omnimedia’s licensing revenues, cfo Howard Hochhauser told the audience. As Kmart’s minimums fall off, that revenue stream will decline from $65 million to about $20 million, he added.