Macy's to Martha Stewart: Your J.C. Penney Deal Is Not a Good Thing

Martha StewartAt one time, America's iconic happy homemaker Martha Stewart got to spend a lot of time at home -- months, in fact, when she was under house arrest after serving real jail time for making false statements to authorities regarding insider trading. Now, once again Martha Stewart's name has been connected to legal issues, as Macy's (M) has filed a legal complaint against her namesake company for hooking up with J.C. Penney (JCP).

Macy's has filed a lawsuit against Martha Stewart Living Omnimedia (MSO) to block the company's new licensing agreement with J.C. Penney. Since 2007, Macy's agreement with Martha has allowed it to carry a line of Martha Stewart-branded home items that has kept cash registers ringing in Macy's home sections.

It's no surprise that Macy's management's spoiling for a fight to keep Martha wares at their retail abode. Macy's agreement with Martha Stewart Living was supposed to be an exclusive one, and a plan to peddle similar wares at lower-end Penney's doesn't sound terribly "exclusive."

J.C. Penney isn't just planning on carrying Martha Stewart-branded items: Martha Stewart shops will be opened within J.C. Penney stores in early 2013. Getting even cozier with Martha, J.C. Penney has also purchased a $38.5 million stake in Martha Stewart Living Omnimedia.

According to The Wall Street Journal, a Martha Stewart Living spokesperson commented in December that the J.C. Penney line will be "completely different" than the selection Macy's customers encounter. There's been no comment on the lawsuit so far.

Teflon Martha

Regardless of this skirmish with Macy's, one of the most interesting aspects of this situation is that Martha Stewart's name and brand power is still so formidable that companies would fight to keep her all to themselves.

One would have thought that Stewart's insider-trading scandal and subsequent five-month prison stint would have tarnished her image beyond repair. Clearly, that's not the case. (She just returned to her namesake company's board of directors last fall, after a five-year ban on such corporate activities.)

Neither was Stewart's brand sullied by its past association with super-low-end discounter Kmart (SHLD), nor by the fact that she described it as "not the nicest place to shop" as the deal ended.

However, if you look at Martha Stewart Living Omnimedia's five-year stock chart, you'll notice that it hasn't been too good for the company's shareholders over the long haul. The company has been plagued with falling sales and margins for years now, and hasn't turned an annual profit since the year ended December 2007.

The one thing that apparently has survived very well over the years despite all kinds of adversity is Martha Stewart's brand name, since it continues to rake in the partnerships and clearly still has some pull with American consumers. Perhaps crafting and entertaining are better survival skills than one might think. Maybe Macy's shouldn't be messing with Martha -- or her name, anyway.

Motley Fool analyst Alyce Lomax does not own shares of any of the companies mentioned.




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BeenThere

BFA Co - Geez, guess you don't read any posts or the news about own Macy's tactics or CEO's wife's and ex just as guilty for same if not worse:
{¶ 10} Blackwell's marital status is another prominent point in the story.   He was married at the time of the Kellogg transaction in 1999 but had divorced by the time of his criminal trial in 2005.   His ex-wife (Tina Stephan Blackwell, now remarried and called “Mrs. Lundgren” in the complaint) occupied a major role in the criminal trial.   Hours after signing final separation papers in their domestic-relations case, Lundgren apparently changed testimony she had previously given under oath to the Securities and Exchange Commission (“SEC”) in a civil investigation of the WF tender offer.   Once a favorable witness, according to Blackwell, she became one of the government's leading witnesses against him.  Id.  Blackwell says his ex-wife was herself guilty of tipping family members but  gained immunity from the government in exchange for her cooperation.3  Complaint, at ¶ 13-14, 17, 19;  Answer, ¶ 19-20;  United States v. Blackwell (Dec. 14, 2005), S.D. Ohio No. 2:04-CR-134, 2005 WL 3440880 (“Opinion, 12-14-05”), filed with the Singer affidavit in this case on December 15, 2006, at tab C, 2005 U.S. Dist. LEXIS 35939.

http://caselaw.findlaw.com/oh-court-of-common-pleas/1117263.html

Sounds like you work @ Macy's

February 01 2012 at 10:59 PM Report abuse +2 rate up rate down Reply
BFA Co

Oh my gosh Martha you've already been in jail for insider trading which is an illegal SEC law...now this you really test the thje brink of doing wrong.....every one is hurting in this economy,you too but do it legally esp under contract not to violate your contracts.....

February 01 2012 at 3:22 PM Report abuse -3 rate up rate down Reply
BeenThere

Martha Stewart's products and brands can be found in many places, NOT just Macy's which is what's missing here!!! JC Penney is taking NOTHING away from this spoilsport, as Macy's has a very small piece of MS's pie which is NOT being conveyed here, or much elsewhere it seems! BUT, because Macy's seems to think its the ONLY store to carry MS, with a exclusive, (yet actually non-exclusive contract) tries every which way to convey this misconception, by bashing its best seller! Its SO OUTRAGEOUS! and a big FAT lie that needs to be straightened out here and now.Do some research and learn Martha Stewarts's items are everywhere, the world over! From Staples, Michaels, Joann Fabric and Crafts, Hobby Lobby, AC Moore, HSN, QVC UK, Walmart KMart online, Flor.com, Safavieh rugs, Crane stationary, to MS Clean products in every major supermarket, and get this Martha Stewart has teamed with KB Home to design/build beautiful HOMES in FL, CA and NC!!! Is that enough to mention? It's a good thing JC Penney stock is on the rise, and rightly so. Macy's just can't stand it and using MS new Penney deal to discredit MS products! One must only think Macy's fat PR machine is dropping some sheckles in her bucket, or other enticing perks to yield such pro-Macy's articles, just as Macy's PR campaigns blast that big star in our faces. Whats that about? Yeah, we know it's your brand logo... will it dazzle us into thinking we'll all feel like big stars if we shop at Macy's, buying no talent imbecile Kim Kardashian's products, (as if she's a good role model for anyone), if we shop at Macy's? What do they think? we're imbeciles? Bottom line, it's a FREE Country and Martha can sell her products and name to whomever she chooses, and certainly, not foolish enough to jump onto a new contract until the old Macy's one runs out this year. Macy's is leaving their 2012 contract expiration with this latest news. One much look closely at Macy's and how they pump out this trash. Macy's is a very greedy and ruthless company, and to use a fitting quote from the movie Scarface seems to describe their ethics, "In this country, you gotta make the money first. Then when you get the money, you get the power. Then when you get the power, then you get the women." - Tony Montana (Al Pacino). Ironically with all the talk about the insider trading wrongs Martha did, how bout this dirt found on internet: Macy's CEO Terry Lundgren married Tina Stephan, ex-wife of disgraced marketing guru Roger Blackwell, who did 5 yrs for insider trading, thanks in part to Stephen's testimony against Blackwell under immunity as she was in the scheme, collecting $1M in divorce before skipping off for Lundgren. But, not before at their 11th wedding anniversary dinner in 2002, Blackwell says his then-wife told him "she was going to look for someone better." Nice ruthless people running Macy's - ya think? LOL

February 01 2012 at 10:00 AM Report abuse +2 rate up rate down Reply
savemycountry911

Boycott the felon.

January 31 2012 at 8:09 PM Report abuse rate up rate down Reply
Good Day Temper

Sure hope Macy will keep her line, because with the advertisements JC Penny is playing on the air, I would not step foot in their store. The commerical is a disgrace and insult to WOMEN!

January 31 2012 at 7:44 AM Report abuse rate up rate down Reply
Mule

I don't know why Macy's is in such an uproar she is also with K-mart (Sears).

January 31 2012 at 7:06 AM Report abuse +3 rate up rate down Reply
chibird007

Don't care whats going on with Macy's and Martha...but the latest move with Penny's has lost my business.... Just got back to renewing my relationship with them when they came out with this new move...... Hate the commercials ...turn the tv to other things when the come on and won't be coming off the hill to shop there without knowing whats on sale....

January 31 2012 at 1:33 AM Report abuse rate up rate down Reply
1 reply to chibird007's comment
Good Day Temper

I do the same thing! HATE HATE HATE the commericals. Will never go to that store because of them!

January 31 2012 at 7:46 AM Report abuse rate up rate down Reply
denxbi

"Oh it's totally different,,,they're blue, not red, silly."

January 30 2012 at 11:58 PM Report abuse rate up rate down Reply
Larry

my beef is with alyce lomax, the writer of the article, and what i believe to be an unfair slant to jcpenney. this is the second article i have read written by her bashing jcpenney. while this article says she does not owe stock in any company mentioned, motley fool is invested in walmart, cosco and other retailers. i believe she is using her position to down retailers her company is not invested. since she is a writer for motley fool then motley fool must approve. i believe the bashing is caused by jcpenney stock going up 7 points last week.

January 30 2012 at 11:41 PM Report abuse +4 rate up rate down Reply
1 reply to Larry's comment
Been There

It does seem that way. Lomax is somewhat reticent and left out a few important points in this corporate triangle debacle. Martha Stewart's products and brands can be found in many places, NOT just Macy's which is what's missing here!!! JC Penney is taking NOTHING away from this spoilsport, as Macy's has a very small piece of MS's pie which is NOT being conveyed here, or much elsewhere it seems! BUT, because Macy's seems to think its the ONLY store to carry MS, with a exclusive, (yet actually non-exclusive contract) tries every which way to convey this misconception, by bashing its best seller! Its SO OUTRAGEOUS! and a big FAT lie that needs to be straightened out here and now.

Do some research and learn Martha Stewarts's items are everywhere, the world over! From Staples, Michaels, Joann Fabric and Crafts, Hobby Lobby, AC Moore, HSN, QVC UK, Walmart KMart online, Flor.com, Safavieh rugs, Crane stationary, to MS Clean products in every major supermarket, and get this Martha Stewart has teamed with KB Home to design/build beautiful HOMES in FL, CA and NC!!! Is that enough to mention?

It's a good thing JC Penney stock is on the rise, and rightly so. Macy's just can't stand it and using MS new Penney deal to discredit MS products! One must only think Macy's fat PR machine is dropping some sheckles in her bucket, or other enticing perks to yield such pro-Macy's articles, just as Macy's PR campaigns blast that big star in our faces. Whats that about? Yeah, we know it's your brand logo... will it dazzle us into thinking we'll all feel like big stars if we shop at Macy's, buying no talent imbecile Kim Kardashian's products, (as if she's a good role model for anyone), if we shop at Macy's? What do they think? we're imbeciles?

Bottom line, it's a FREE Country and Martha can sell her products and name to whomever she chooses, and certainly, not foolish enough to jump onto a new contract until the old Macy's one runs out this year. Macy's is leaving their 2012 contract expiration with this latest news. One much look closely at Macy's and how they pump out this trash. Macy's is a very greedy and ruthless company, and to use a fitting movie quote from "Scarface," “In this country, you gotta make the money first. Then when you get the money, you get the power. Then when you get the power, then you get the women.” - Tony Montana (Al Pacino). Ironically with all the talk about the insider trading wrongs Martha did, how bout this dirt found on internet: Macy's CEO Terry Lundgren married Tina Stephan, ex-wife of disgraced marketing guru Roger Blackwell, who did 5 yrs for insider trading, thanks in part to Stephen's testimony against Blackwell under immunity as she was in the scheme, collecting $1M in divorce before skipping off for Lundgren. But, not before at their 11th wedding anniversary dinner in 2002, Blackwell says his then-wife told him "she was going to look for someone better. "Nice ruthless people running Macy's - ya think? LOL

January 31 2012 at 11:42 AM Report abuse +1 rate up rate down Reply
Been There

When will Macy's STOP its Martha bashing? Just because Martha Stewart's home goods was a Best Seller for them, does NOT mean they own her! Their contract is up this year with her. JC Penney has invested S38.5M into her company, came up with a clever idea to open Martha Stewart Shops within their department stores. Macy's could have done the same, but their CEO is too piggish with the $$$, so they get out their army of lawyers to sue and hold things up. Outrageous! Macy's wants a MONOPOLY and is just a plain old bunch of POWER MAD Control Freaks. Not too mention they treat their workers like garbage and make their own labels overseas, taking jobs away from their OWN USA, then want you to spend your hard earned money in their stores. Forget about it! Follow Martha to JC Penney, anywhere but Macy's!

January 30 2012 at 9:57 PM Report abuse +2 rate up rate down Reply