Shaw Ends Flooring Program with Martha Stewart

New York, NY, February 24—-In an earnings report released yesterday, Martha Stewart Living Omnimedia Inc. revealed that the company has received unspecified revenues as a result of the dissolution of its Martha Stewart Signature flooring program with Shaw Industries. The company explained that merchandising revenues in the fourth quarter of 2004 were $23.7 million, compared to $22.5 million in the fourth quarter of 2003. The higher revenue is due in part to an increase in revenue from Kmart resulting from contractual minimum royalty guarantees, as well as revenue related to the dissolution of the Martha Stewart Signature flooring program. Reports of Ms. Stewart's potential legal problems surfaced in mid-2002, just a couple of months after she and Bob Shaw, chairman and CEO of Shaw Industries, announced that Shaw would produce a Martha Stewart Signature floorcovering line. Last July, Scott Sandlin, vice president of marketing for Shaw, said that sales projections for the line were "north of $100 million" but that the sales figures at that time were short of projections. Sandlin said the Signature line was in "about 360 stores" nationwide -- "obviously, considerably less than targeted." Julius Shaw, an executive vice president for Shaw, said at the time of Stewart’s legal entanglements that "We're not mad at (Stewart) at all. We feel sorry for her at this tough time in her life." Overall revenues for Martha Stewart Living Omnimedia, Inc. for the fourth quarter of 2004 were $60.2 million, compared to $70.9 million in the prior year's quarter. Operating loss for the fourth quarter was $(9.5) million, compared to operating income of $2.3 million for the fourth quarter of 2003.

Related Topics:Shaw Industries Group, Inc.

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