Martha Stewart crafts line to expand to Wal-Mart

The New York-based media and merchandising company said two new assortments--Martha Stewart Create and Martha Stewart Celebrate--will make their debut in the majority of Wal-Mart stores in the U.S. and Canada. Martha Stewart Living had launched its Crafts line in 2007 at arts and crafts stores, including Michael's Inc.

Martha Stewart Living's shares rose more than 2 percent in morning trading before slipping 19 cents, or 2.7 percent, to close at $6.80, the low end of its 52-week range of $5.22 to $16.49. The company has lost about three-quarters of its value since a high of about $37 in February 2005 as investors worry about limiting growth amid woes at Kmart, its longtime retail partner, whose contract ends in January 2010. Kmart has been selling the Martha Stewart Everyday home line since 1997.

Martha Stewart Living is looking to replace Kmart, owned by Sears Holdings Corp., with another low-price operator. Company officials Wednesday declined to comment on whether it was pursuing Wal-Mart Stores Inc. to be a replacement, only saying, "We remain committed to our relationship with Kmart and continue to design beautiful, new Martha Stewart Everyday products exclusively for Kmart."

Martha Stewart Living has been aggressively expanding with new merchandising deals and new publications in recent years. Last year, Martha Stewart unveiled an exclusive home furnishings collection with Macy's Inc. as part of a multiyear deal; it also signed a multiyear deal to develop a cobranded line of frozen and fresh food with Costco Wholesale Corp., which started being rolled out late last year.

Martha Stewart Living is also exploring international opportunities for its magazines and its merchandise to fuel future growth.

Martha Stewart Living swung to a profit of $10.3 million, or 20 cents per share, in 2007 from a loss of $17 million, or 33 cents per share, in 2006. Revenue rose 14 percent to $327.9 million, helped by improvements in its broadcast, publishing and merchandising divisions.

In June, the company announced that Susan Lyne, who rebuilt the Martha Stewart Living business in the aftermath of the namesake founder's legal woes, has stepped down as chief executive, and the job is being split between two company executives--Wenda Harris Millard, who had been president of media at Martha Stewart, and Robin Marino, who had been president of merchandising.

Martha Stewart Living Omnimedia said Wednesday that the Create line features crafting essentials and memory-keeping products like paper, cutting mats and ribbons, as well as craft and activity kits.

The Celebrate assortment includes ready-made paper-based weddings essentials like stationery and cake toppers. Martha Stewart teamed up with EK Success, one of the country's leading makers of scrapbooking and creative consumer products, to manufacture, market and sell the products.