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Stewart's Catalog Has Its Final Sale

January 20, 2005|From Bloomberg News

Martha Stewart Living Omnimedia Inc., whose founder is serving time in prison for obstructing justice, is closing its money-losing catalog business in February.

The company, announcing what it called "our final sale" on its website, offered no explanation for the action. A spokeswoman for New York-based Martha Stewart Living, Elizabeth Estroff, said the closure was part of a previously announced plan.

The company's Internet/Direct Commerce unit, including its catalog and website operations, was losing money even before Martha Stewart's legal troubles began, said Dennis McAlpine, an independent analyst based in Scarsdale, N.Y.

"A lot of the customers that Martha Stewart had probably weren't Internet users in the beginning," McAlpine said. "If you were an Internet customer, you could go to Kmart and get the stuff. A lot of the customers just went to Kmart."

Martha Stewart Living will continue to sell flowers through its website www.marthasflowers .com and will offer Martha Stewart Everyday merchandise through Kmart Holding Corp.'s stores, the company said.

Martha Stewart Living decided to close "The Catalog for Living" to focus its Internet and direct-commerce business on delivering how-to advice and increasing its flower sales, the company said in an Aug. 8 filing with the Securities and Exchange Commission.

The website is offering discounts of as much as 70% and more than 300 products, including a retro alarm clock, a woodland tree cake mold and a kit to teach people how to knit.

Company founder Stewart, 63, was convicted last year of lying to investigators about her sale of ImClone Systems Inc. shares. She is scheduled to be released from federal prison in March. After a period of confinement in her Connecticut home, she will star in a daily one-hour television show.

Shares of Martha Stewart Living fell 61 cents to $28.31 on the New York Stock Exchange.

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