Macy’s has the Material Girl. Wal-Mart has Miley Cyrus.
And now Home Depot has Martha Stewart. Just rolling out at the nation’s largest home improvement chain are Martha Stewart Living paints, patio furniture, closet organization kits and cleaning supplies. All except the cleaning supplies are exclusive to the Home Depot.
With the deal, Home Depot joins other national retailers seeking to cash in on celebrity popularity to sell more products and attract certain demographics.
At Macy’s that translates into a new line of junior clothing called Material Girl that pop diva Madonna is designing with her daughter Lourdes. At Wal-Mart, it’s entertainer Miley Cyrus with designer Max Azria-branded junior clothing.
Home Depot is hoping Stewart’s brands will bring more women into stores and that they’ll stay longer, lured by her signature blue logo and her eye for style and design.
The home and garden maven heads a media empire that reaches millions of women a week. She’ll use the Home Depot products on her television shows, Web site and magazine.
It’s the kind of publicity that even Home Depot’s more than $1 billion advertising budget can’t buy.
The Stewart deal is intended to boost sales at Atlanta-based Home Depot, where annual revenue declined from $71.3 billion in 2008 to $66.2 billion in 2009.
Stewart products boosted sales at another mass retailer in the past: Kmart once sold $1 billion worth of Stewart products annually. Macy’s now has the exclusive right to sell Stewart’s linens and decorative tableware.
Robin Marino, president and chief executive officer of merchandising for New York-based Martha Stewart Living Omnimedia, said in February the merchandising business had a “solid year” with sales of the Martha Stewart Collection at Macy’s and Martha Stewart Crafts at Michaels. Stewart’s company also benefits. It earned $52.6 million in 2009 from merchandising (mostly royalties on her licensed products).
Toon van Beeck, a Jersey City, N.J.-based senior analyst with IBISWorld Inc., believes sales of Stewart products at Home Depot will beat Kmart’s sales.
“Home Depot can build it more strongly and get even more sales out of it,” van Beeck said of the Stewart partnership, partly because prices are higher on patio furniture, he said. Stewart’s sets range from $399 to $2,499.
In addition to lines at Home Depot, Macy’s and Michaels, Stewart is launching pet products at PetSmart this spring.
Van Beeck said the household diva could burnish Home Depot’s brand appeal to women.
Although it’s the number one home improvement retailer in the nation, Home Depot has kept its warehouse-discounter decor, even as number two Lowe’s built stores with wider, cleaner aisles and tidier merchandising displays.
“Lowe’s has more of that customer-friendly environment,” said van Beeck. “This might bring a lot more women towards Home Depot.”
Executives from Home Depot have denied that Mooresville, N.C.-based Lowe’s built a better path to the female buyer.
But the Stewart items at Home Depot are a clear overture to women, who tend to make the majority of household purchasing decisions. It’s not the first time Home Depot has gone with fashion-forward — and therefore female-friendly — ideas. The chain once carried area rugs by Kathy Ireland, the former supermodel turned supermogul who has her own line of products. Home Depot Expo stores — shuttered last year — also were geared toward upscale design. The Stewart deal is more focused on a low- to mid-range price point.
“Women shop where they’re comfortable,” said Gordon Erickson, senior vice president of merchandising and décor at Home Depot. “Martha is a do-it-yourselfer. She has made her own cabinets, paints her own walls and is a classic homeowner. I’ve seen her handle a drill as good as any man.”
For a while at Home Depot, expect to see the Stewart products prominently displayed in eye-catching places. That’s to push the brand and make sure people see it, Erickson said.
“Newness is very important to us because new sells first,” he said.
He said that while women are comfortable in the “Big Orange boxes,” Home Depot wants them to stay in the store longer.
“What shocks people is we pretty much have the same number of female customers as Lowe’s,” Erickson said, citing Home Depot surveys. Lowe’s percentage of female customers averages 47-51 percent compared to Home Depot’s 48-49 percent, Erickson said.
Lowe’s would not comment specifically on the Stewart deal with its rival, though Lowe’s did have to stop selling Martha Stewart paint colors last year to make way for Stewart’s exclusive deal with Home Depot.
Lowe’s spokeswoman Katie Cody said Lowe’s is carrying designer paint colors by Laura Ashley, Waverly and Eddie Bauer in the Valspar Signature line.
As appealing as they seem, retail deals with celebrities aren’t always a slam dunk, especially if the celebrity runs into legal or image trouble, said Sucharita Mulpuru, vice president and principal analyst of e-business retail at Forrester Research. Witness the recent Tiger Woods drama. PepsiCo’s Gatorade ended its relationship with Woods, as did other sponsors of the golfer.
As for Stewart, she served time in prison in 2005 after a scandal involving insider-trading charges. Revenue at her company — about $245 million in 2009 — still hasn’t returned to 2001 levels ($296 million), which was when the charges came to light. Revenue has been steadily climbing back, however, from a low of $187 million in 2004.
“I think that any time you tie yourself to a celebrity, there’s always a risk,” Mulpuru said. “You walk in assuming that’s not going to be the case. Hopefully, she’s [Stewart] learned from her lessons. And any damage done to her image has already been done.”
On a recent day, the new strategy was playing out at a Home Depot. Karen Stephens of Mableton was lured by Stewart’s patio sets after seeing them on Home Depot’s Web site.
At the store on Cumberland Parkway, she was checking out Stewart’s Lily Bay Set for $1,299. She had already looked at sets by other brands for $3,000 to $4,000, and almost bought a La-Z-Boy patio set for under $1,000.
“I’m so glad I didn’t buy that yesterday,” she said. “This looks like a bargain,” she said, inspecting the rounded arms of the all-weather wicker set by Stewart. The set came with a sofa, two chairs, two ottomans and a coffee table, and customizable fabric.
She said she would probably order it that night online, so it would be delivered to her home with free shipping.
Martha Stewart Living products now at Home Depot include:
Paint
8-ounce testers for $2.94
Gallons for $24.97
Most popular color: a yellow named “cornbread”
Cleaning products*
Dish soap, 17 ounces, $3.99
All-purpose cleaner, 32 ounces, $3.98
Ultra-concentrated laundry detergent, 1 gallon, $17.98
Closets
Design-your-own closet starter kit, $139
Patio
Pacifica four-piece set with loveseat, $399
Palm Cove deep seating, six-piece set, $2,499
*The cleaning products also will be sold at other stores.
Source: Home Depot, staff
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