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Martha Stewart's Retail Partners Stand by Her Despite Felony Conviction

Strategic Insights

— 1 min read

Despite Martha Stewart's conviction in a stock-trading scandal and her subsequent sentencing to five months in prison, her key retail partners, Kmart Holding Corp. and Sears Canada Inc., are sticking with her. Sales of her Martha Stewart Everyday products have remained solid, with a 6.5% increase in sales since her March conviction. Kmart's sales of Martha Stewart goods rose despite the retailer's overall struggles, with a 13% decline in sales at stores open at least a year in the quarter ending April 28.

Key Takeaways:

  • Kmart and Sears Canada are continuing their exclusive partnership with Martha Stewart despite her felony conviction and subsequent sentencing.
  • Sales of Martha Stewart Everyday products have remained solid, with a 6.5% increase in sales since her March conviction.
  • Kmart's sales of Martha Stewart goods rose despite the retailer's overall struggles, with a 13% decline in sales at stores open at least a year in the quarter ending April 28.
  • 80-85% of Kmart shoppers who have bought Martha Stewart products remain loyal, according to researcher Britt Beemer.
  • Martha Stewart's products continue to appeal to consumers, with her design team having a clear understanding of the needs and desires of American women.
  • Kmart and Martha Stewart extended their partnership in April by two years, through 2009, and added new product categories such as ready-to-assemble furniture.
  • Magazine subscribers remained unfazed by the verdict, with research showing that they were still supportive of Martha Stewart roughly six weeks after the sentencing.

Statistics:

  • 80-85% of Kmart shoppers who have bought Martha Stewart products remain loyal.
  • 6.5% increase in sales of Martha Stewart goods since her March conviction.
  • 13% decline in sales at Kmart stores open at least a year in the quarter ending April 28.
  • 23% drop in total revenues for Martha Stewart Living Omnimedia in the quarter.
  • 54% ownership of Sears Canada by Sears, Roebuck and Co.

Sources:

  • Chicago Tribune, "Despite Martha Stewart's Conviction, Retailers Stick With Her," May 20, 2004.
  • Martha Stewart Living Omnimedia Inc., "May 7 financial report."
  • America's Research Group, research by Britt Beemer.
  • Sears Canada, statement by spokesperson Vincent Power.
  • Kmart Holding Corp., statement by spokesperson.
  • BBK Ltd., statement by Gary Ruffing.
  • Chicago Tribune, "Kmart Says Sales Rose in Quarter," May 12, 2004.
  • Martha Stewart Living Omnimedia Inc., "May 7 press release."

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