Martha Stewart loves your pet.

The home decorating expert and tastemaker (Macy's good, Home Depot good, Kmart not so good) wants you to buy pet clothing, collars, leashes, bedding, grooming supplies, toys and more, Martha Stewart Living Omnimedia said on Tuesday. Pet products retailer PetSmart Inc will sell the accessories starting in the spring of 2010.

Age Group Ltd, which makes licensed products for brands such as Disney, Baby Phat, Hello Kitty and Peanuts, will design the goods.

The announcement adds pet stores to the roster of retailers where you can see Martha's name emblazoned on various products. As we mentioned above, Macy's and Home Depot are two others. One place where you WON'T see her name anymore after next January is Kmart, the discount retailer. The company and Kmart are ending their relationship, something that's been known for months. Stewart's latest comment on that relationship came last Friday when she wished them well and said it would be wrong to interpret earlier remarks she made about Kmart as being inconsistent with her good feelings.

Those remarks, which she uttered on CNBC in September, were more in the spirit of "doberman pinscher" than "cute little kitten," but no matter -- PetSmart no doubt will sport a variety of tasteful Stewart products to suit a variety of temperaments and breeds.

(Photo: Reuters)

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Sears Holdings beat Wall Street expectations when it reported earnings this morning, helped by cost cuts, and the market sang its praises by sending shares up 8 percent. The streamlining isn't over either, as the company controlled by Eddie Lampert announced plans to shutter another 24 stores.

We're wondering about the exuberance of the market's response, since the results still show marked same-store sales declines for the company's Kmart and Sears, Roebuck stores and questions remain about whether the company can pull off a real turnaround in the future.

But maybe we should ask the short sellers. As of mid-February, 14.8 million shares of Sears Holdings --about 12 percent of its shares outstanding --were held short. That's down about 18 percent in the past month, suggesting a decrease in bearish sentiment toward the stock.
 
Also in the basket:

Limited Brands profit falls, sees first-quarter loss

Finlay to exit department stores, cut jobs

Safeway price cut efforts hurt profits

(Photo/Reuters)

"I think the media have done us a terrible disservice," Tansky said at an evening event sponsored by Financo Inc during the annual National Retail Federation conference in New York, attended by our own Karen Jacobs. "The media, I think, should start thinking about the impact they are having on retail."
    
Many of these media stories were based on predictions from leading research groups, such as Deloitte, who gave gloomy forecasts due to the global financial crisis, the U.S. housing slump and credit crunch. 
    
And when retail chains finally began to take down the tinsel after the holidays, their performance proved even worse than that, with sales dropping for the first time in the nearly 40 years they have been tracked.
    
We didn't know it last night, but Tansky may have had other reasons to be piqued than our role in bringing the bad news. Neiman today said it would start making interest payments on some of its senior notes by issuing more debt, rather than using cash, and planned to fire 3 percent of its workforce.
    
The news comes barely a week after Neiman posted a 31.2 percent drop in same-store sales at its unit that is home to the Neiman Marcus and Bergdorf Goodman stores.

(Photo of a Neiman Marcus gift book from a Christmas past: Reuters)

Jersey City, New Jersey:

Rose Fernandez, law enforcement worker:
"Yesterday I received my social security savings (statement) and looked at it. I'm concerned. I'm going to put more away. 
    
Rose said her extended family was only living according to their means and were careful not to spend anything extra. She recently came out of $6,000 in credit card debt herself.

"It's come to a point now when we are giving only to the kids. ... It's the way things have been. We have a meal together, laugh, joke and watch the little ones open gifts. When we grew up we had food, a home, a roof over our heads and a warm bed. That's rich. In that sense, we are still rich now."

Janice Peters, social worker: 
"There really isn't that much money. Based on the news, it's just going to get worse. ... I've been thinking about the present and the future. But I feel much worse about the future."
    
Janice said she has between $4,000 and $6,000 in credit card debt at this point. 

Heidi Hickman, marketing manager for USA Today:
"I have a lot of things on my mind. I got a notice there are going to be layoffs in my department. ... It's making me stop right now and not do anything until I find out. That's going to tell me a lot about what's going to happen and if I should halt spending altogether or not."
    

Washington DC:

Judith Aplon, 70, visiting from Boulder, Colorado: 
"I intend to do little or no shopping ... because I'm terrified about the economic situation and most of us don't need anything else. ... I've watched 43 percent of my retirement disappear and I don't know what's going to happen in the ensuing months and years so I'm being very cautious."
 
"I've never been much of a consumer and I have found the consumerism of the country is appalling. It has reached its point of break."
 
"We talk about other countries, where they have religious battles; in India for instance between Hindus and Muslims. It's just the same here, except our religion is 'buy, buy, buy.'" 
  
(Photos/Reuters)

But what did you buy? Not much, apparently...

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Call it a test of the American consumer's mettle.
How many will feel confident enough about the economy, and their own future within it, to spend money that is increasingly hard to come by? How many will resist the siren call of steep discounts and sales for even the hottest gadgets, like those available at Apple Inc's stores?

This Black Friday, such questions are not only central to the future of many of the best known U.S. retailers, but amount to a key indicator of how quickly the country's consumer-led economy will shrink in the coming months. How deep a recession could it be, how long might it last?

At Shop Talk, our colleagues are out across the country today, talking to scores of shoppers and documenting their stories, the hardships they have seen this year and the fears they voice about the coming year, after the holiday gatherings are over.

Nearly 45 percent of Americans are expected to turn out for the sales that started today and last through the weekend, according to the International Council of Shopping Centers. Stay tuned for anecdotes and pictures, and our full coverage on Reuters' Holiday Shopping page. Let us know what you are seeing too.

Also in the basket:

U.S. holiday sales begin before turkey grows cold

UK retail sales plunge back to series low in Nov-CBI

(Photo/Reuters)

U.S. retailers, some of them on the brink of complete ruin, are already slashing prices ahead of Black Friday next week. We'll be covering the fallout of the financial crisis and how it is changing the consumer psyche in great detail, both here and on the Reuters Holiday Shopping coverage page. To start off, here are a few images of how "recession" is the new sexy when it comes to luring shoppers, from our reporters in the trenches.

New York City, where the sign says it all, via Nick Zieminski:

It almost looks like the Entire Store is for Free, though that is not the case:

These are from Atlantic City, if anyone is looking for diamonds, via Martinne Geller:

Or dress shirts (everything MUST go):

Plus a handbag, provided there is something to put inside:

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Longs, the drug store chain with a heavy concentration of stores in California, got a surprise offer from Walgreen late on Friday that topped its previous buyout agreement with rival CVS Caremark.
    
Longs shares opened on Monday ahead more than 5 percent to $75.80, slightly above the Walgreen offer of $75 per share and proving that investors believe they can't lose as the two biggest U.S. pharmacy operators battle over an acquisition.
    
At the very least, analysts say, CVS will have to sweeten its earlier $71.50 per share bid, despite its protestations to the contrary. And that doesn't even take into account the possibility that Walgreen will become even more aggressive to keep Longs out of its rival's hands.
    
The Walgreen offer is also lending a helping hand to Longs' two biggest shareholders, who said on Friday they wouldn't give up their shares to CVS because the offer price was too low.
    
What's clear is that even as Wall Street reels from the downfall of Lehman Brothers and a surprise buyout of Merrill Lynch, a deal for purveyors of Tylenol and toothpaste can still capture some investors attention.

Footnote: Lehman has been advising CVS on the Longs deal, along with Deutsche Bank. Curious how quickly CVS can regroup to make a higher offer, if it should choose to do so?

Also in the basket:

Best Buy nabs Napster for $121 million (Reuters)

Target gets naming rights to Minnesota Twins stadium (Reuters)

Reddy Ice suspends dividend, sends sales exec on leave (Reuters)

(Photo: Reuters)

Despite the odds going into today's annual meeting, Yahoo's board and CEO Jerry Yang won a huge endorsement from shareholders. Yang alone won more than 85 percent of votes cast despite calls by some for his ouster.

But that didn't dampen the festivities at the Fairmont Hotel in San Jose. Here are a few choice quotes from the meeting, where investors were invited to lament over failed deal talks with Microsoft, rich compensation for executives and Yahoo's stance on Internet censorship.

"I'd like to see timesheets posted on the Internet for the work of the directors as well as the executives of the company," said Dirk Neyhart, a retired stockbroker from Berkeley, California, who said he holds less than 1,000 shares of Yahoo.

"I would be more than happy to submit timesheets for the work that I have done in the last 6 months. It's been about 26 hours in the course of a 24-hour day," said Yahoo Chairman Roy Bostock.

"There was never a compelling offer put on the table. That never occurred in this process," Bostock said on Microsoft.

"Carl is a smart guy. He is a good guy despite some of the things that are written about him," Bostock said on billionaire activist investor Carl Icahn.

"I think you have overpaid in terms of executive compensation, overplayed your hand with Microsoft and overstayed your welcome on the board," said Eric Jackson, holder of 250 Yahoo shares and head of a coalition of investors with 3.2 million shares.

"I think the board's decision was a correct one (on Microsoft). As an investor, I was kind of sweating along with them as they went through their deliberations ...  I think Microsoft is the wrong corporation (for Yahoo)," said Richard Lammerding, 71, of Cloverdale, California, who with his wife, says he owns 1,200 shares.

Lammerding also labeled Microsoft an "over-the-hill, green-tentacled octopus from Redmond. My support and my wife's support is with this board and this management team."

(Photo of Yahoo investor Henry Lee leaving annual shareholder meeting: Reuters)