Stewart brands hold value despite verdict

By Lorrie Grant
USA Today

Companies that make or sell Martha Stewart brands appear not to be deterred by her felony conviction.

Most report no change in sales and say they'll sell her goods for as long as consumers buy them.

"It's pragmatic. Business owners look at the ... investment in the brand and won't drop it easily," says George Whalin, president of Retail Management Consultants.

The brand's selling point has been style at a value price, not necessarily the name, merchants say. For example, a 270-thread-count, queen-size sheet set by Martha Stewart costs about $30 at Kmart, versus about $55 for department store brands.

What some partners and licensees are saying:

Bernhardt Furniture. The maker of three collections of Martha Stewart Signature upholstered and occasional pieces says retailers report continued robust sales.

"We had an excellent weekend, with consumers continuing to buy all of these products, so we have no plans to change anything," says Alex Bernhardt, chairman and CEO of the Lenoir, N.C.-based company.

Additions to the Lilly Pond line roll out next month, the Turkey Hill line just hit stores and there are plans for new pieces in the Skylands line. The collections are named for Stewart's homes.

Sherwin-Williams. The No. 1 U.S. paint maker will keep on mixing some 400 of her paints. Martha Stewart Everyday Colors paints are sold at Sears and Kmart, while the company sells the Martha Stewart Signature line in its own stores.

"Right now, the consumer continues to vote for these product lines with their pocketbooks," says Bob Wells of Sherwin-Williams. "We believe our retail partners will continue to stock them, and we will continue to supply them."

Seiyu. The Japanese retailer 36 percent owned by Wal-Mart has carried Stewart products since 2001. Her towels and linens are the most popular goods in its 400 stores throughout Japan.

"Seiyu has seen no significant changes in consumer acceptance," says Bill Wertz of Wal-Mart.

Sears Canada. Martha Stewart's products are sold in all 122 stores and its catalog and Web site. No changes have been made in displays or marketing, says spokesman Vincent Power. "Customer reaction is the first thing we measure through sales, and we'll see what happens," he says. Sears Canada, 55 percent owned by Sears Roebuck, has carried all the Martha Stewart Everyday line but paint since 2003.

Kmart, which has an exclusive deal for Martha Stewart home basics in the United States, and Shaw Industries, a licensed maker of floor coverings, declined comment.

Retail experts expect Kmart to stay the course because Stewart's goods account for about 5 percent of sales and draw traffic to the stores. "If they're smart, they'll work with the company to lessen the damage, maybe by taking away her picture but sticking with the brand and product pictures," says Whalin.

But Brenda Sternquist, professor of merchandising management at Michigan State University, says support will wane as inventory on hand sells. "The reality is, the retailers can't continue to support her. Over time, consumers aren't going to be attracted to a product associated with a felon."