Sears Not Amused by Martha's Deal with Macy's

April 8, 2005

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Martha Stewart's new deal with Macy's is not going down very well over at Kmart, which has stuck with Ms. Stewart through her trial, prison term and continuing quality problems while selling $1 billion of her products each year.

But now Ms. Stewart has signed on to sell a new "upscale" line of bed and bath furnishings, casual dinnerware, flatware, glassware, cookware, garden furniture and holiday decorations at Macy's, and the chairman of Sears Holdings, which owns Kmart, is not amused.

Edward S. Lampert expressed doubts about Ms. Stewart's future with Kmart and said her contract, which has four years remaining, has been "not that great" in terms of sales. "What they did with Macy's probably makes sense for them, but it also shows you where their head is at," Lampert said.

At the Sears Holdings annual meeting, Lampert noted that under the contract, Sears could begin carrying Ms. Stewart's products but has no plans to do so.

"We've tried to have a bigger relationship with [Martha Stewart Omnimedia] and we haven't been successful," the Chicago Tribune quoted Mr. Lambert as telling reporters. "Maybe they don't like us anymore."

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.

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