Shaw Stands by Martha
Dalton, GA, July 17--Martha Stewart was sentenced Friday to five months in prison, but a Shaw Industries official said the company will stick with her, according to the Chattanooga Times/Free Press
"The sentencing doesn't change anything we were doing before," said Scott Sandlin, vice president of marketing for the Dalton, Ga.-based floor-covering giant.
"The only thing we're doing is that we've got some feelers out with our accounts, asking, 'Do we need to do anything for you?'
"We're going to do the right thing for our customers," Mr. Sandlin said.
Ms. Stewart was convicted in March of lying to federal authorities investigating her 2001 sale of stock in ImClone, a biotechnology company. She sold the stock one day before the federal government rejected an ImClone cancer drug. The company's stock plunged shortly thereafter.
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 floor-covering line.
Mr. Shaw said at the time that the deal was a "game-changer" for the industry.
Mr. Sandlin said the timing could have been worse.
"The good news and bad news, I guess, is that it broke when it did," he said. "It broke during the launch, which was brutal, but if it was going to break, maybe that was the best thing."
Mr. Sandlin said the Signature line was in "about 360 stores" nationwide -- "obviously, considerably less than targeted."
He said that sales projections for the line were "north of $100 million." He declined Friday to discuss specific sales figures, but said those figures were "short" of projections.
Even so, Mr. Sandlin said, Shaw officials had long since decided that they were in with Ms. Stewart for the long haul.
"We'd made our decisions on the program prior to her being convicted," he said. "We sat down with their people in December (2003) and said, 'What's best for both of us?'
"The tough thing for us is that we've developed a personal relationship with those folks and with her. The worst thing is that a woman's going to jail," he said.
Frank O'Neill, publisher of Pound Ridge, N.Y.-based Floor Focus magazine, said it "makes sense" that Shaw is sticking with the Stewart line.
"I wouldn't want to speculate on what kind of long-term impact this will have on Shaw," he said, "but I'm glad to hear they're sticking by her.
"She's tough. She might surprise everybody and rebound. She's a pretty resourceful, resilient person," Mr. O'Neill said.
Related Topics:Shaw Industries Group, Inc.
