Is Martha Stewart Overextended at Retail?
A recent article in USA Today, "Is Martha Stewart’s brand too confusing?", explored whether Ms. Stewart has overextended her name across retail, particularly as her new line of office supplies for Staples hits the selling floors.
Ms. Stewart’s retail career began when she became a Kmart spokeswoman in 1987. The Martha Stewart Living Everyday line at Kmart didn’t launch until 1997, but blew up with revenues peaking at $1.6 billion in 2002. Ms. Stewart’s relationship with Kmart began to sour after a deal in 2005 was reached with Macy’s for a line of home products. Her contract with Kmart expired in January 2010 amid lawsuits.
While the Martha Stewart brand had been languishing at Kmart, given the discounter’s struggles, the move also allowed Ms. Stewart to diversify the line’s retail distribution and at the same time broaden the product line.
Michael Kupinski, who follows Martha Stewart Living Omnimedia for Noble Financial Group told USA Today, "They decided that they did not want to put all their eggs in one basket like they did with Kmart."
But now some are saying the name is sold at too many stores. Starting with the Martha Stewart Collection for Macy’s in 2007, the brand has expanded to include crafts sold at Michael’s and Jo-Ann Fabric, home improvement goods at Home Depot, pet supplies at PetSmart, and now office supplies at Staples. A deal signed in December to bring Martha Stewart boutiques to J.C. Penney starting in 2013 has led to a lawsuit with Macy’s.
The move to offer office supplies at Staples — including filing cabinets, sticky notes, journals and rubber bands — was seen by some as an example of her moving into too many categories.
Ms. Stewart claims that as a lifestyle company, the name can span a wide range.
"You don’t find me making things that don’t fit into the home," Ms. Stewart told USA Today.
Martha Stewart brand fans point to ongoing success. Martha Stewart Living Omnimedia generated more than a billion dollars in retail sales last year (up from $750,000 in 2010) with 8,500 products in more than 38,000 stores nationwide.
"Sure you have new names like Rachael Ray," Phoenix Partners Group analyst Robert Routh, told Businessweek. "Martha was the first. She is the original, like Betty Crocker, Pierre Cardin, Laura Ashley."
- Is Martha Stewart’s brand too confusing? – USA Today
- Staples Makes Home Office Organization Easy with Debut of Exclusive Martha Stewart Home Office with Avery Product Line – Staples
- Martha Stewart says Kmart is a bad thing – Daily Finance
- Macy’s Fires Back at Martha Stewart in Court Fight Over J.C. Penney Sales – Bloomberg News
- Macy’s Says Martha Stewart’s Dance Card Is Too Full – Bloomberg Businessweek
Discussion Questions: How can retailers gauge if the Martha Stewart brand has become overextended? Generally speaking, how can retailers gauge whether a brand is losing its appeal?