Cross-selling will be key in merged Sears-Kmart

NORRIDGE, Ill. -- Martha Stewart, meet Craftsman tools and Kenmore appliances.

The home doyenne has some new brand neighbors in the aisles of select Kmart stores -- and probably Sears stores, too, at some point. Sears Holdings Corp., which reports quarterly results for the first time this week, hopes the emerging partnership can breathe new life into two faded retail behemoths.

''We're looking at different opportunities on how Sears and Kmart can cross-merchandize," Sears spokeswoman Lisa Gibbons said.

Scant sales data exist to assess how Sears Holdings and its 3,800 stores are faring since the company was formed with the March 24 purchase of 119-year-old Sears, Roebuck and Co. by Kmart Holding Corp. Edward Lampert orchestrated the deal as Kmart's chairman and Sears' largest shareholder. Sears Holdings is carrying on Kmart's contrarian policy of not reporting monthly sales results.

Wall Street is cautious, amid skepticism that Sears and Kmart are struggling any less now that they have joined forces. Some observers doubt the company can keep pace with fast-expanding rivals while being preoccupied with melding Kmart and Sears.

The company isn't saying when products from the popular Martha Stewart brand, already sold at Kmart, might be available at Sears. Analysts would be surprised if it isn't soon.

Investors aren't complaining about Sears' strategy: The stock rose 83 cents to $154.91 yesterday, up about 18 percent since trading began March 28.