Is M Diddy Putting Kmart On Notice?

Martha Stewart Living Omnimedia, Inc. (MSO) and Federated Department Stores (FD) have inked a deal that will get an exclusive line of Martha Stewart branded home goods on the shelves of Macy's Department Stores starting in the fall of 2007. Gaining access to a more upscale batch of clientele is a move that investors and analysts like and I'm sure Martha loves. And if you're one to believe rumors, you may also believe that Martha has a thing for flexing her muscles to show just how much power a domestic goddess can wield. While I can't confirm she is getting any actual enjoyment from this business move, it does create a bit of a quandary for Kmart Stores and parent company Sears Holdings Corporation (SHLD), with their current licensing deal with Omnimedia ending in 2010. As much as I do believe Martha appreciates the revenue that she earns from the masses that are keeping Kmart alive by buying Martha Stewart Everyday products, I see nothing wrong with shrewd business woman M Diddy not showing love for the shareholders that roll with Sears. If the Macy deal works out a little better than expected, and so good that loss of Kmart money can be mostly made up, why not focus on the upscale and force the average house wife to drive the extra 15 minute to go to the mall? They might not mind. As Kmart fights for basic business survival and to keep some market share against the likes of Wal-Mart Stores, Inc. (WMT) and Target Corporation (TGT), having the exclusive lines from not only Martha Stewart, but brand names like Jaclyn Smith and Joe Boxer is key. What will it take to keep the Omnimedia powers that be happy, and ensure they keep the Everyday line on the Kmart shelves? - The Martha-Macy's marriage: A good thing? (MSN Money) - Martha, Macy's Ink Swank Household Goods Deal (Forbes) NBC Universal Store