Macy’s sues Martha Stewart over J.C. Penney deal
BY SANDRA GUY Business Reporter January 23, 2012 6:52PM
Martha Stewart | Photo courtesy of Eisenberg Rolfes Photography
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Updated: February 25, 2012 8:21AM
Macy’s, which has touted the Martha Stewart Collection as its exclusive and top-selling housewares and home-decor brand, filed a lawsuit Monday seeking to stop the domestic diva from selling certain goods at rival J.C. Penney.
At the same time that Macy’s has extended for five years its exclusive deal with Stewart’s company, Martha Stewart Living Omnimedia, to supply Macy’s with cookware, kitchen utensils and bed and bath decor, the retailer is seeking a preliminary injunction in the New York State Supreme Court, claiming that Stewart breached her contract by making the deal with J.C. Penney. Stewart’s contract with Macy’s is set to expire in January 2018 after the five-year extension.
In December, Penney, which has lagged Macy’s in sales growth, announced it was buying a 16.6 percent stake in Stewart’s company for $38.5 million. As part of the deal, Penney said it would feature Stewart’s home and lifestyle merchandise in “stores within stores” staffed by dedicated salespeople.
Penney’s announcement was the first major news from its new CEO, Ron Johnson, who is credited with helping design Apple’s sleek, popular retail stores and creating their Genius Bars.
Macy’s features Stewart in TV commercials alongside its other celebrity brands such as Kenneth Cole, Jessica Simpson, Donald Trump, Tommy Hilfiger and SeanJohn by hip-hop entrepreneur Sean Combs.
Stewart’s company moved to Macy’s after her company failed to reach an agreement on a new contract with Kmart, where the Martha Stewart Everyday line had been popular.
Martha Stewart’s company has had other setbacks, with the “Martha Stewart Show” on Hallmark Channel set to be canceled in April, Us Weekly reported.
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