Sears Chairman Sounds Off Against Martha Stewart

Style Diva's Deal With Macy's Raises Questions About Future

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WASHINGTON (AdAge.com) -- Martha Stewart may be spreading herself too thin for Sears. Sears Holdings Chairman Edward Lampert said yesterday at the
Sears is questioning its relationship with Martha Stewart after her company agreed to provide a line of products to Macy's.
Sears is questioning its relationship with Martha Stewart after her company agreed to provide a line of products to Macy's. Credit: AP
company's annual meeting that the diva of style's new deal with Federated Department Stores raises major questions about her future in Kmart and Sears.

Macy's deal
Ms. Stewart's Martha Stewart Living Omnimedia agreed to provide Macy's with a line of home accessories starting in fall 2007. The deal is allowed under the terms of the company's Kmart contract.

But Mr. Lambert, while stopping short of saying that Ms. Stewart's days at Kmart were numbered, called her Kmart contract, which lasts another four years, "not that great," mainly because of fees tied to high minimum sales targets. "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."

Mr. Lambert also raised doubts about the future of Ms. Stewart's contract. "If we thought it was in our best interest to put Martha Stewart in Sears stores, which contractually we have the right to do, we would do it," the executive was quoted as saying. "If we put a product into Sears, we don't want to have to pull it out in a year, or two years, or three years. We don't want to do that only to have it yanked away."

Thick and thin
Until now Kmart stuck with Ms. Stewart through thick and thin -- the thin being her court case and term in prison. According to Martha Stewart Living Omnimedia, $1 billion of its company products are sold in Kmart every year.

The company's statement responding to Mr. Lambert's comment said: "We have a contract with Kmart through the end of the decade. We remain committed to working with them to deliver the distinctive products that Kmart customers have come to expect from us."
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