SAFAVIEH DEAL IS SECOND
FLOOR COVERING VENTURE
FOR MARTHA STEWART
NEW YORK -- The Safavieh-Martha Stewart Living Omnimedia licensing deal is not the first time that the Martha Stewart organization has taken on the floor covering business. From Summer, 2001 to March 2005, MSLO was involved in a large-scale licensing venture with Shaw Industries, which covered multiple floor covering categories.
In the Summer of 2001, MSLO and Shaw Industries announced a large-scale venture which included broadloom carpeting, wood flooring, ceramic tile, rugs and even linoleum. Retailers from across the country came to Shaw headquarters in Dalton, GA to hear about the big program. Martha Stewart herself addressed the retailers.
Retailers were asked to devote a large space to a fully merchandised and color-coordinated Martha Stewart flooring boutique.The program included merchandising units, racks and store furnishings as well as the product itself.
Soon after the Shaw sales team began selling the program and making initial store installations, the country was rocked by the terrorist attacks of Sept 11, 2001. Floor covering retailers, like many other businesses, became hesitant to make major commitment to new programs as they faced an economic recession and jittery consumers.
Rugs were a minor part of the program, which was largely devoted to broadloom carpeting and hard surface flooring. In fact, we visited one of the stores in the program and found the Martha Stewart rugs hanging in the retailer's regular rug department, but not in the Martha Stewart boutique.
The Shaw-Martha Stewart program ran into image difficulties a year or so later, when Martha Stewart was charged with and later convicted of insider trading.
In March 2005, MSLO and Shaw Industries announced it had ended its partnership after four years.
Observers in the floor covering industry say that the Shaw-Stewart split had little, if anything, to do with Martha Stewart's legal problems.
"The licensing partnership just didn't work from the very beginning," said one major retailer who asked not to be named. "Shaw asked for a major financial commitment for a program that just didn't seem that good." he said.
Officials at Martha Stewart Living Omnimedia did not respond to Rugnews.com requests for comments on what the company learned from its experience with Shaw.
Shaw Living is a successful participant in other licensing programs, but did not aggressively market the Martha Stewart rug collections under the Shaw licensing deal.
Shaw Living is currently involved in licensing programs with such home furnishings programs as Kathy Ireland Home, Tommy Bahama, and Jack Nicklaus.
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4.24.06