• Chicago Tribune/Dow Jones Newswires, Wednesday, September 19, 2007 12 PM

Kmart is relaunching its Martha Stewart Everyday home furnishings line next week after years of sagging sales and contract tussles. The revamped line offers better-quality bed and bath linens at lower prices, executives say. For example, a queen-size set of 500-thread-count sheets will have a regular price of $59.99, versus $79.99 for a 300-count set earlier this year.

Kmart's relaunch, which overhauls 1,100 items, comes as Martha Stewart Living Omnimedia is rolling out a new proprietary line called Martha Stewart Collection in Macy's. But the overhaul, which has been in the works for a year, "has nothing to do with Macy's," insists Bill Stewart, Kmart's chief marketing officer.

Earlier this year, Martha Stewart inventory at Kmart stores was slashed severely to make way for the new fall merchandise. Its contract with Martha Stewart Living is set to expire in 2009, and this month, Kmart is also introducing a new line of proprietary home goods called Abbey Hill.

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