Martha Stewart Living Omnimedia's (NYSE: MSO) recent announcement that its crafts line would be debuting in Wal-Mart Stores, Inc. (NYSE: WMT) stores nationally sent MSO up more than 5% at first, but the stock has since given all that back and then some: the stock is down nearly 10% from where it was before the announcement.
The company needs to replace the guaranteed licensing fees from K-Mart that are in the process of phasing out, and revenue from that business is likely to plummet when the guarantee declines from $65 million this year to around $20 million next year.
But Wal-Mart? Haven't their been entire books written on how tough it is to make money selling to Wal-Mart? It's easy for me to understand Wall Street's skepticism about this deal, and there have been a lot of uninspiring developments for the company in recent months: first the company paid $45 million for the Emeril empire, what was supposed to be company transforming acquisition. Then a few months later, CEO Susan Lyne resigned abruptly -- which doesn't speak well for the new strategy.
Maybe the Wal-Mart deal will work out splendidly -- but the company appears to be all over the place.
Martha Stewart goes to Wal-Mart
Posted Jul 10th 2008 5:20PM by Zac Bissonnette
Filed under: Wal-Mart (WMT)
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Reader Comments (Page 1 of 1)
7-11-2008 @ 3:56PM
sickofthebull said...
Yes, keep buying in Wal-Mart and keep complaining about your jobs being outsourced....
STUPID ....STUPID ...PEOPLE.....
7-10-2008 @ 10:33PM
Jose Cuervo said...
Martha Stewart's line of products are as old as Montgomery Wards. Is Wal-Mart that desperate to invite her into their stores? Says alot about Wal-Mart I guess...... CHEAP!