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Martha Does Macy's

But She's Not Leaving Kmart Bereft

April 6, 2006

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Macy's is launching a new line of Martha Stewart-branded home furnishings, called Martha Stewart Collection. It's an attempt to move upscale from the problem-plagued Martha Stewart Everday line carried by Kmart.

The new line, set for launch in the fall of 2007, will include bed and bath furnishings, casual dinnerware, flatware, glassware, cookware, garden furniture and holiday decorations.

Kmart consumers have been up in arms for years over problems with the Everyday line, most notably glass-topped patio tables that have a bad habit of shattering without warning.

At least one class action lawsuit has been filed charging that Martha Stewart's company knew of the problem but failed to warn consumers.

"The glass to my Martha Stewart Bar Harbor Patio Collection shattered for no reason last night. The glass which I thought was supposed to be safety glass is in a millon pieces all over my deck," said Leslie of Beachwood, NJ.

Others have complained about rust and excessive wear and tear.

"I bought the Victorian Dining Set with table and umbrella and 5 chairs as well as the love seat and 2 rockers and the chaise lounge. They are peeling after only two summers out and the cushions and umbrella are very faded and ripping and worst of all I cannot find replacement cushions anywhere," Marganne of Klamath Falls, OR, complained.

Macy's, a unit of Federated Department Stores, has had problems competing against discounters like Target and home-furnishings superstores like Bed, Bad & Beyond. Having its own "exclusive" brands is supposed to help Macy's differentiate itself.

This doesn't mean Martha is walking out on Kmart. Her Everyday line will continue to line Kmart's aisles through at least 2009, when the current contract expires.

The new Collection line is being called "affordable luxury" while the Everyday collection is being positioned as, well, less upscale. In other words, cheaper.

"This line not only covers the fundamental parts of our home-furnishings business, it also allows us to expand our seasonal and holiday offerings," said Janet Grove, a Federated vice chairwoman and head of Macy's Merchandising Group.

Federated last year acquired the rival May Department Stores Co., creating an 850-store national chain.

Martha Stewart's Martha Stewart Living Inc. said it sought to expand its reach beyond Kmart after research found that some 30 million women go to a store specifically because it carries Martha Stewart products.

"With all the new Macy's stores, virtually all our markets will be covered," said Susan Lyne, president and CEO of Martha Stewart Living.

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