Originally created 07/17/04

Kmart stands by Martha Stewart's brand



DETROIT -- Kmart Holding Co. reiterated its loyalty to Martha Stewart's company Friday after the domestic style maven was sentenced to five months in prison for lying about a stock sale.

"Martha Stewart Living Omnimedia is a valued brand partner of Kmart," the Troy-based retailer said. "We look forward to continuing our mutually beneficial and successful relationship with MSLO."

Kmart, which has exclusive rights to the Martha Stewart Everyday brand in housewares and other products, said it could not comment on the details of the case or sentencing, calling it "a personal matter."

Stewart was sentenced in federal court in New York to five months in prison, followed by five months of home confinement.

She no longer heads the multimedia empire that bears her name. Stewart surrendered the chief executive's title after her 2003 indictment and gave up her seat on its board following her March conviction.

Analysts have long said there would be no reason for Kmart to drop the Martha Stewart brand. Kmart needs such brands to distinguish itself from Wal-Mart Stores Inc. and Target Corp., and Martha Stewart products have a reputation for quality and remain popular with consumers.

C. Britt Beemer, chairman of America's Research Group, said his surveys have shown that 80 percent to 85 percent of people who previously bought Martha Stewart products continue to do so.

"What everybody's missed in this discussion is that the Martha Stewart design team is clearly one of the best in America at knowing the American female," he said. "As long as they can keep producing these winners, Martha's company will be able to maintain a certain level of sales success."

That Stewart's actual prison time will be relatively brief is a good thing for Kmart, since a longer sentence - and a longer absence from the public eye - would have done greater harm to the brand, Beemer said.

On the Net:

Kmart Holding Corp.: http://www.kmartcorp.com/

Martha Stewart Living Omnimedia Inc.: http://www.marthastewart.com