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Friday, April 14, 2006

MSO & Macy's: Yes, Kmart Did Notice

In what may become a Friday tradition for Cool Corporate dot COM, Martha Stewart is the center of attention. In an update from last Friday's post 'Is M Diddy Putting Kmart On Notice,' the Chairman of Sears Holdings Corporation (SHLD), Edward Lampert, said this week that Martha Stewart Living Omnimedia, Inc.'s (MSO) plan to partner with the Macy's chain from Federated Department Stores (FD) does raise questions about the future of Martha Stewart Everyday merchandise and Kmart.

Omnimedia announced last week it was launching an exclusive line of home products in Macy's stores for a fall 2007 debut to make an appeal to more upscale clientele. Lampert gave a statement that while it seems like a business deal that makes a lot of since for their company, "it also shows you where their head is at."

Sears Holdings was formed last year when Kmart bought Sears, Roebuck & Company. The new company produced plans to share exclusive brands between the two chains, including longtime Sears staples such as Craftsman tools and Kenmore appliances. But a 'problematic' contract that predates the Sears buyout make it difficult to license Martha Stewart branded merchandise to competitors. Macy's and Sears are were viewed as closer competitors that Macy's and Kmart.

Lambert didn't come out and say that Martha's time on the Kmart shelves were coming to an end, but he did say that the Omnimedia contract with Kmart was "not that great," and made it no secret to his desire to renegotiate the terms. The current licensing deal expires in 2010.

- Sears Chairman Sounds Off Against Martha Stewart (Advertising Age)
- Martha Stewart's Macy's Deal Strains Sears Ties (Reuters)


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