STEWART TEAMS UP WITH HOME BUILDER.

Byline: Gregory J. Wilcox Staff Writer

Domestic diva Martha Stewart can now add the entire house to the prodigious list of her products through a partnership announced Wednesday with KB Home, one of the nation's biggest builders.

Martha Stewart Living Omnimedia Inc. and the Los Angeles-based home builder have already finished their first collaboration, a 650-home development in Cary, N.C., a suburb of Raleigh.

Stewart worked with KB Home's architectural team in designing the floor plans, exteriors and furnishings, said Bruce Karatz, the home builder's chairman.

A mutual friend introduced the two over the summer. Karatz said he was impressed by Stewart's knack for details and her energy and was not put off by her stretch in federal prison for lying about a stock transaction. She was released in March.

``She is a productive woman who's sort of been on the lam for two years having to deal with her legal problems ...,'' Karatz said in an interview.

``Generally, you don't associate yourself with felons. I think it's a real special circumstance how she ended up having to go to prison and the fact of the matter is she is enormously talented.''

Terms of the deal were not announced.

But it could help KB Home branch out to a much more upscale buyer by tying the homes to the Stewart brand.

``We think there is a huge amount of brand value that will translate to home buyers,'' Karatz said.

For example, the Cary project is called KB Home Twin Lakes: Homes Created with Martha Stewart.

The homes will range in size from 1,500 square feet to 4,100 square feet, priced from the low $200,000s to the mid-$400,000s. Stewart's houses in New York and Maine provided the design inspiration.

Buyers can also select Stewart's favorites for flooring, faucets, light fixtures, cabinetry, countertops and other items available at the KB Home Studio in Raleigh.

Models, scheduled to be finished early next year, will be outfitted with Stewart's products.

``I'm delighted to team with KB Home,'' Stewart said in a statement. ``We look forward to presenting them to communities across the country.''."

Other projects are planned for Houston and Atlanta.

Since leaving prison, Stewart has jumped back into business and now appears on two television shows, which have so far drawn tepid ratings.

Meanwhile, Stewart's company will debut a 24-hour channel via Sirius Satellite Radio in November. It will feature programming on gardening, cooking and entertaining.

A DVD series featuring tips from her former show, ``Martha Stewart Living,'' has been released by Warner Home Video, and her first cookbook in six years is also coming out.

A book on business is already in stores.

Analyst Dennis P. McAlpine, managing director of McAlpine Associates in Scarsdale, N.Y., is not too enamored of the partnership.

``I don't think Martha Stewart means anything to the consumer in terms of a house. Does this mean the house will clean itself or have nice sheets? There is no image that comes to mind,'' he said.

Wall Street also issued a lukewarm response. Shares of Martha Stewart Omnimedia closed down 85 cents, to $20.65. KB Home shares dropped 40 cents, closing at $64.10.

Gregory J. Wilcox, [phone]

greg.wilcox(at)dailynews.com

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Photo:

(color) This model is among the houses to be available in Cary, N.C., through a partnership between KB Home and Martha Stewart.

KB Home