June 21, 2001
Kmart Corporate Communications
Mary Lorencz: (248) 463-1021
Nicole Dowswell: (248) 463-1077
Martha Stewart Living Omnimedia, Inc.
Megan Stack: (212) 827-8128
Samantha Schabel: (212) 957-3005
FOR IMMEDIATE RELEASE
KMART CORPORATION AND MARTHA STEWART LIVING OMNIMEDIA, INC.
SIGN NEW LONG-TERM MERCHANDISE AGREEMENT
NEW YORK, N.Y., June 21, 2001 - Kmart Corporation (NYSE: KM) and Martha Stewart Living Omnimedia, Inc. (NYSE: MSO) today announced that they have signed a new long-term merchandising agreement that will significantly lengthen the term and expand the scope of the Martha Stewart Everyday (MSE) brand of home and garden related products. Under the terms of the agreement, MSE products will continue to be available exclusively at more than 2,100 Kmart stores nationwide, online at BlueLight.com and through marthastewart.com until 2008 with conditional renewal until 2013.
"At Kmart, we are committed to having the best brands, the best merchandise, and the best shopping experience in the mass market segment," said Chuck Conaway, Chairman and CEO, Kmart Corporation. "Martha Stewart Everyday is an important brand to us. With this agreement, it will provide Kmart with the exclusive home-based authority and foundation, the differentiation, and the competitive advantage integral to making our stores the number one destination for Moms, Kids and Home, for years to come. The brand helps us continue to put the customer first by offering a high value proprietary product with unique sales and marketing opportunities, in a growing number of coordinated cross-category merchandising programs."
"We are thrilled with this long-term agreement and the confidence it places in our Martha Stewart Everyday brand," said Martha Stewart, Chairman and CEO of Martha Stewart Living Omnimedia, Inc. "The benefits it provides our company are numerous. Most importantly, it guarantees our long-term ability to provide the widest possible audience nationwide through Kmart's more than 2,100 stores with our "how to" tools and essential products to help improve the quality of living in and around the home. This long-term agreement also ensures our guaranteed financial growth and brand support through advertising and other commitments, so important to both MSO and MSE."
MSO and Kmart intend to expand the number of Martha Stewart Everyday products and sku's within MSE's five existing available categories, as well as increase the number of MSE categories at Kmart in the future.
Chuck Conaway further announced that Kmart will roll out two new MSE categories within seasonal formats for 2002, craft and holidays, bringing the number of MSO's eight core content areas of expertise represented by MSE product at Kmart to seven.
In commenting on the launch of the seasonal category, Martha Stewart said, "We are extremely pleased to be able to offer holiday and craft items which are at the center of holiday celebration and associated family values so integral to MSO and Kmart under Chuck Conaway."
The MSE brand will continue to maintain and grow product assortments from current levels for existing MSE categories offered at Kmart, and will strive to offer complete collections of basic essential products for new categories in line with current practices. Working in collaboration with a team of experts at Kmart, MSO will also continue to develop MSE product designs in the company's design studios in New York City, as well as the signature signage, packaging, advertising, and other promotional materials and consumer facings associated with the brand. Kmart remains responsible for manufacturing, fulfillment, warehousing, marketing and in-store operations. Detailed financial terms of the agreement were not disclosed.
Kmart Corporation is a near-$40 billion company that serves America with more than 2,100 Kmart and Kmart supercenter retail outlets. Kmart donates $35 million each year to support its hometowns and local non-profit organizations. Kmart associates also provide their most valuable resource time - everyday in their local communities. In addition to serving all 50 states, Kmart operations extend to the Caribbean Islands and Asia Pacific. More information about Kmart is available on the World Wide Web at www.bluelight.com under the "About Kmart" section.
Martha Stewart Living Omnimedia, Inc. is an integrated content company consisting of four business segments. The Company's Publishing segment includes Martha Stewart Living, Martha Stewart Weddings, and Martha Stewart Baby magazines; books written by Martha Stewart and the editors of Martha Stewart Living; and the syndicated askMartha newspaper columns and radio show. The Internet/Direct Commerce segment consists of the Company's high-end catalog, Martha by Mail, and marthastewart.com, which includes the online Martha by Mail store and marthasflowers, and eight linked content and community channels. This segment also includes The Wedding List, a wedding registry and gift business. The Television segment includes a nationally syndicated, daily one-hour television program, "Martha Stewart Living"; a daily cable television program, "from Martha's Kitchen", on the Food Network; weekly appearances on CBS's "The Early Show" broadcast; and periodic network primetime television specials. The Merchandising segment includes strategic partnerships through which merchandise designed by the Company's in-house creative experts is distributed and/or sold through Kmart, Sherwin-Williams, P/Kaufmann, and Zellers. Martha Stewart Living Omnimedia, Inc. is listed on the New York Stock Exchange under the ticker symbol MSO.
This press release contains certain "forward-looking statements," as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements can be identified by the use of terminology such as "may," "will," "should," "could", "expects," "plans," and "intends." The Company's actual results may differ materially from those projected in these statements, and factors that could cause such differences include downturns in national and/or local economies; a softening of the domestic advertising market; changes in consumer reading, purchasing and/or television viewing patterns; unanticipated increases in paper, postage or printing costs; technological developments affecting products or methods of distribution such as the Internet or e-commerce; changes in government regulations affecting the Company's industries; and the receptivity of consumers to new product introductions. These and other factors are discussed in more detail in the Company's filings with the SEC, copies of which may be accessed through the SEC's World Wide Web site at http://www.sec.gov.The Company is under no obligation to update any forward looking statements after the date of this release.
Photos of Chuck Conaway and Martha Stewart at the bell ringing are available via Associated Press at 212/621-1902, Reuters America at 212/833-9255 and Bloomberg Photo at 212/893-3420. A daily news feed is available beginning at 2:30 p.m. Eastern Daylight Time via satellite at Telstar 6 Transponder 4, C-band and by fiber line at Waterfront # 1630.