The Long Goodbye... The End of the Kmart Era

In 1997, the public warmly received Martha Stewart Everyday product lines at their local Kmart. With a huge system wide roll-out, Martha Stewart introduced style and elegance to Kmart shoppers with a wide array of bed and bath (soft home), kitchen, holiday, garden, furniture, lighting, candles, and decorative home lines. Shortly after its introduction, Martha Stewart Everyday became one of the premiere collections for the home in the country.

Fast forward to 2009. Kmart is in the beginning steps of the long goodbye as the contract with Martha Stewart Living Omnimedia closes at the end of January, 2010.

I stopped into two of our local Kmart stores recently. I found the shelves at one store sparingly stocked with MSE products; at another, nearly the entire line was on clearance. It was disappointing, yet expected… just not quite so soon.

In the Martha Stewart Living Omnimedia first quarter earnings call this week, MSLO officials acknowledge the phasing out of the product line in Kmart stores. In response to an analysts question regarding the availability of MSE products in Kmart through the remainder of the year, MSLO’s CFO, Kelli Turner commented, “…The answer to that is that yes, we do expect our product to be there through the end of our term with them, but they are phasing out of it, as we move forward because they have to liquidate the inventory by the end of January of 2010, then they've got a three-month sell-off window.”

Robin Marino, President of Merchandising also commented on the Kmart contract end. “As we said on our last call, 2009 will be a transition year as we continue to realize the impact of the wind down of our K-Mart relationship. We think of 2009 as the end of an era as we transition out of our relationship with K-Mart and into a new era in 2010 where we'll have the pieces in place to be a stronger and more diversified company. A big part of this new era will of course be a new relationship at mass retail and I can tell you that we continue to progress positively on that front. Our designers are hard at work on new designs and concepts for 2010. We have a lot of work to do but we are confident and excited about our future, so stay tuned.” When asked if there will be a delay between the end of the Kmart era and the start of a new, Marino said, “Well, we expect to be ready for a seamless transition into 2010.”

Kmart recently announced a new partnership with Country Living Magazine for a full line of home products to be introduced this summer. The company, however, denies that the Country Living line is the replacement for the Martha Stewart Everyday products.