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The News & Observer

By Sue Stock, The News & Observer, Raleigh, N.C.

Aug. 7--You can buy a Martha Stewart home in Cary or North Raleigh. And you can fill it to the pastel-colored brim with food, furniture and flooring all bearing the Martha seal of approval.

The homemaking maven has been busy this year, striking partnerships with several companies to put her name on hundreds of products that are turning up in thousands of stores.

The latest example: a 2,000-item Martha Stewart line of home goods that will debut at Macy's stores next month.

While Stewart is expanding her reach nationwide, she's particularly present in the Triangle.

She is behind not one, but two KB Home neighborhoods here, and she even made a visit to the first in Cary last year.

She may be drawn to the region by its demographics, strong housing market and level of outdoor activity, said Warren Shoulberg, editor and publisher of weekly industry publication Home Furnishings News.

"Martha Stewart clearly looks at the Southeast as a place for good business," he said. "Furniture with white or light finishes sell best in the Southeast. Almost every one of Martha's previous introductions has had a collection with that look."

But with so many stores now carrying Martha Stewart lines, the question becomes: how much is too much of a "good thing"?

"Discount tables are littered with celebrity stuff that didn't sell at full price," said Robert Passikoff, president of Brand Keys, a New York branding research firm.

Strategy is a gamble

There are indeed those such as Nanette Merritt of Wake Forest who aren't eager to jump on the Stewart bandwagon.

"I'm getting kind of tired of her, to be honest," said Merritt, who was shopping in Kmart with her daughter last week. "It seems like she gets her fingers in everything."

But that strategy may be quite intentional and may say a lot about the need of Stewart's company for cash flow, Passikoff said.

"She cuts deals where she agrees to give some sort of exclusivity for some type of product with her name on it," he said. "But in doing so she's guaranteed a certain minimum payment."

Martha Stewart Living Omnimedia said last week that its second-quarter merchandise sales were bolstered by some of the new lines but that any gains were offset by slumping sales of Martha Stewart merchandise at Kmart.

For the quarter ending June 30, the company's operating loss was $7.8 million, much more than its $1.8 million loss in the second quarter of 2006.

It has been a long road back from Stewart's 2004 conviction on insider trading charges. The case and its fallout forced Stewart to resign from the board of her own company and caused it to lose $60 million that year, compared to a loss of $2.8 million in 2003.

Some shoppers, such as Rachel Faison of Raleigh, have forgiven Stewart.

"It's not like she killed somebody," said Faison, who was shopping the Martha Stewart craft items at Michaels recently looking for ideas for her upcoming wedding. "I don't care as long as her products are good."

Martha Stewart Living Omnimedia is trying to turn any resurgence of public support into sales.

Along with the new partnerships, the company has been making investments this year in new staff members and a new Web site. But the efforts are targeted, said company spokeswoman Elizabeth Estroff.

The company is partnering with retailers who sell items that are Martha-esque, including home building, home decorating and crafts, Estroff said.

Hedging on Kmart

Stewart has partnered with Kmart the longest, starting that relationship back in 1987.

As Kmart faltered in the 1990s, Stewart was widely credited for keeping the chain afloat. But the terms of her current deal, which runs through 2009, reportedly decreases Stewart's set payment with each passing year.

"I think it's smart for her not to put all her eggs in one basket," said Vanessa Facenda, senior reporter for marketing and branding publication Brandweek. "You don't know what's going to happen with Kmart."

Stewart has remained loyal to Kmart in a way, preparing to launch her biggest line of bed and bath items there in September.

But there are plenty of retailers that are happy Martha is finally entertaining other offers.

Just within the past few months, Stewart announced an endorsement deal for sewing machines, including the Singer brand.

She's working with discount warehouse retailer Costco on a line of food products that will launch next year.

She introduced a line of Martha Stewart Crafts items in the 900-plus Michaels stores nationwide, launched a Martha Stewart Colors paint line at Lowe's Home Improvement stores, and is developing a line of rugs with Safavieh, a New York-based upscale rug maker.

The key to the strategy is in the products Stewart is introducing in new stores, said Brandweek's Facenda.

"In Michaels, it's arts and crafts," she said. "She has her paint line. But very few of the items overlap."

Wait and see on sales

It will probably be next year before we know the results of Martha's merchandise blitz.

Some items are already in stores, such as the Michaels craft supplies and the Lowe's Home Improvement paint.

Baking bowls, silicone pot holders and spice racks in Stewart's trademark pastel blue and green are just now coming to Macy's shelves.

At Costco, refrigerated and frozen Martha Stewart food products will arrive late this year or early next year.

Costco spokesman David Sherwood said the chain has had success with "co-branded," food items such as juice using both the Costco Kirkland's Signature label and the Newman's Own brand.

"We anticipate [Martha Stewart products] being just as popular and successful," Sherwood said.

Martha's fans trust her

There are definitely shoppers, such as Rolesville resident Sharon Woodlief, who are eager for the new products.

Woodlief has outfitted her entire three-bedroom beach home with Martha Stewart items.

"I have bought Martha Stewart long before she went to prison," she said. "There's a good variety and good quality."

And if Stewart has enough of those loyal followers, it could be a big boon for her company and the new retailers she is working with, said Brandweek's Facenda.

"It's getting people to go to that higher-end brand," Facenda said. "The people who really like Martha, they really trust her. This turns into getting those customers who were buying at Kmart to trade up."

Staff writer Sue Stock can be reached at 829-4649 or sue.stock@newsobserver.com.

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