Value It's A 'Good Thing' - Holiday Central

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It's a make-it or break it time for retailers. The holiday selling season is always a critical time for retailers, but this year this may be even more true. With several retailers already falling victim to a drop in consumer spending, and filing for bankruptcy, retailers will be navigating through some tricky waters. Consumers are strapped for cash due to high energy and food prices, and unemployment is rising. The recent credit crunch has made it more challenging for retailers and consumers to borrow.

This blog will look at the winners and losers in the retail space. Who has the right strategy to capture consumer dollars? It also will look for trends in consumer spending and how that will impact the economy.

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Oct.28

2:56 PM ET

Tuesday, 28 Oct 2008

Value It's A 'Good Thing

Posted By:Christina Cheddar Berk

Topics:Media | Marketing | Stock Picks | Stock Market | Consumers

Sectors:Media | Retail

Martha Stewart Living Omnimedia reported disappointing third-quarter results, and guided estimates for the fourth quarter lower Tuesday, but in an appearance on CNBC, company founder Martha Stewart was upbeat about the state of the consumer.

Stewart's been on a book tour for her latest cookbook, and said the experience—which she likened to a political campaign—has allowed her to take the pulse of the retail scene. (For the full interview, watch the video at left.)

"The customer is there," Stewart told CNBC, "and the customer wants good value. They want really good quality. They want products that fit their lifestyle at the present time when they are on, actually, some serious budgets."

She expects the company [MSO Loading... () ] she founded has an advantage in the current climate because it sells items what people need to use on an everyday basis: cookware, linens and food.

Martha Stewart
Frank Franklin Ii / AP

In the latest quarter, Martha Stewart Living narrowed its loss, as its merchandising business failed to offset weakness in its publishing segment. In addition, the company slashed its full-year forecast and estimated fourth-quarter results would be below analysts' estimates.

Despite the loss and the disappointing outlook, profit at the company's merchandising arm more than doubled as revenue jumped 33 percent.

"Our products are selling and are selling quite well," said Chairman Charles Koppelman, who appeared with Stewart on CNBC. "We are optimistic for 2009."

One surprising bright spot: the company's deal with KB Homes [KBH Loading... () ] to build Martha Stewart-branded communities. The homebuilding venture sold more homes in the latest quarter than it did in the third-quarter of last year, and plans to expand.

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