Posted on: Saturday, July 17, 2004
Retail partners remain loyal to Stewart
| • | Stewart given 5 months in prison |
By Becky Yerak
Chicago Tribune
CHICAGO — Despite Martha Stewart's legal problems over the past year, her key retail partners are sticking with her — and for good reason.
Sales of Martha Stewart Everyday products have remained solid despite their creator's felony conviction in March. She was sentenced yesterday to five months in prison for her part in a stock-trading scandal.
Kmart Holding Corp. and Sears Canada Inc., who sell her products exclusively in the United States and Canada, are standing by her.
"Martha Stewart Living is a valued brand partner of Kmart," the retailer said in a statement. "We look forward to continuing our mutually beneficial and successful relationship."
North of the border, Stewart's jail sentence changes nothing for Sears Canada either.
"Even with the verdict in March, we didn't see any difference in sales patterns," Sears Canada spokesman Vincent Power said yesterday.
Shoppers are compartmentalizing their views on Stewart's legal woes with their regard for the styling and pricing of her products.
"The customer still says 'yes,' so we'll continue," said Power, whose company is 54 percent owned by Sears, Roebuck and Co. of Hoffman Estates, Ill.
The two retailers' continued association with Stewart doesn't surprise one researcher who tracks shopping trends.
"I've found that 80 percent to 85 percent of Kmart shoppers who have bought Martha Stewart products remain loyal," said Britt Beemer, chairman of America's Research Group.
Stewart might be a convicted felon, but she and her design team have as much of a feel for the needs and desires of American women as anyone, he said.
"She sells products that consumers want to buy," Beemer said. And "Martha and Kmart need each other so much that they're both looking for the relationship to continue."
For the quarter ending April 28, sales at Kmart stores open at least a year sank 13 percent, the Troy, Mich., company reported in May.
But Kmart's sales of Martha Stewart goods rose 6.5 percent since the March 5 verdict, according to a May 7 financial report from publicly traded Martha Stewart Living Omnimedia Inc.
Higher sales of Stewart's products at an otherwise struggling merchant can be chalked up to two factors, one former Kmart executive said.
"The amount of Martha Stewart product they now have in the stores is greater today than it was a year ago," said Gary Ruffing, now head of the retail services group at turnaround management firm BBK Ltd.
"And some of it could be a backlash by women who are buying because they're making a statement that they're behind Martha," he said.
