Macy's Wins Temporary Block Against Martha Stewart's J.C. Penney Deal

Martha Stewart
By Karen Freifeld

A state judge on Friday temporarily blocked plans by Martha Stewart Living Omnimedia to sell certain branded products at J.C. Penney stores.

The preliminary injunction was a win for Macy's (M), which has sued Martha Stewart Living (MSO) claiming it has exclusive rights to sell certain Martha Stewart products including soft furnishings, dinnerware and cookware.

In issuing the preliminary injunction, New York State Supreme Court Justice Jeffrey Oing said Macy's had shown likelihood of ultimate success in its lawsuit. "The scale tilts in favor of Macy's," the judge said.

J.C. Penney
(JCP) in December announced plans to open shops within its stores to sell Martha Stewart-branded goods, starting in 2013. Macy's sued Martha Stewart Living, accusing it of breach of contract by entering into the agreement with J.C. Penney.

Macy's claims Martha Stewart Living granted it the exclusive right to manufacture and sell the Martha Stewart-branded goods in Macy's lines under a 2006 agreement that, with a renewal, runs until 2018.

Justice Oing said putting Martha Stewart products at J.C. Penney stores would deprive Macy's of its competitive edge. He also noted that Macy's had helped resurrect Martha Stewart Living's image after its eponymous founder was found guilty in 2004 of lying about a stock sale.

"Macy's took on the risk with MSLO after Martha Stewart left prison," he said.

Martha Stewart, 70, who during the scandal resigned from the company she founded, was named chief creative officer this week, less than two months after she became non-executive chairman.

Martha Stewart Living said it will comply with the restrictions but still planned to go ahead with its deal with J.C. Penney in the first quarter of next year. "Nothing about today's ruling changes that," the company said in an emailed statement.

The company also said it would keep defending its position. "We continue to believe that we have not breached our agreement" with Macy's, the company said. The parties are due back in court in November.

A spokesman for Macy's, Jim Sluzewski, said the retailer expected to continue to sell the Martha Stewart-branded merchandise exclusively for the full term of its contract.

A spokeswoman for J.C. Penney declined to comment.

The Martha Stewart deal is a centerpiece of J.C. Penney's plan to carve its 1,100 department stores into separate boutiques, each housing a distinct brand, by 2015. The concept is a key component of Chief Executive Ron Johnson's strategy for J.C. Penney, which has lost market share in recent years. Earlier this week, Penney and Martha Stewart agreed to broaden the array of merchandise the stores would sell.

The case is Macy's Inc. v. Martha Stewart Living Omnimedia, Inc., 650197/2012, New York state Supreme Court (Manhattan).


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jt2

Martha Stewart never met a dollar she wasnt' interested in pocketing! It's interesting that people bitch about walmart and their products made in China, but Ralph Lauren produces his pricey crap in China and nobody cares until the Olympic uniforms were made there and Martha Stewarts expensive crap is made in China and India and Macys is all over it. And nobody bitches about Macys selling it there. I wouldn't take her stuff if they were giving it away. I have no desire to pay for her lying life.

July 15 2012 at 10:47 PM Report abuse +3 rate up rate down Reply
DARLENE

Martha can't help J C Penney's laskluster sales.

July 15 2012 at 9:18 PM Report abuse rate up rate down Reply
balbelle

You're lucky--JC Penny: Martha Stewart products--manufactured in China-- look good but they are CRAP! See if you an find some good, styllish things manufactured in the good 'ole USA

July 15 2012 at 7:14 PM Report abuse +1 rate up rate down Reply
1 reply to balbelle's comment
freeetob

When Martha Stewart linens were sold through K-Mart they were made in USA and superior to linens sold in higher priced stores such as Macy's. Too bad.

July 15 2012 at 8:58 PM Report abuse rate up rate down Reply
gchu001

"Macy's won temporary block" is outrageous, and it is a gross miscarriage of justice coming from a Chinese minority judge which is poor showing for diversity. This judge should remove himself from this case for his biased mindset against Martha Stewart with his lying comment on her that has no relevance to the contract dispute in the case.

Martha Stewart's company will never get a fair trail from this judge. He is putting enormous pressure on her company to coerce a settlement on Macy's terms in an abuse and misuse of his judicial powers. This judge, as a puppet for Macy's, merely rubber-stamped Macy's legal diatribe and that's the basis for his outrageous block. So Martha Stewart is now in bondage to Macy's, and it's okay for Macy's to put the noose on the Martha Stewart brand, and to destroy new jobs.

Shoppers should support J.C. Penney and reject Macy's legal tactics and abuse and misuse of the legal system.

Martha Stewart served time because of grossly incompetent legal representation; she did nothing wrong, and she has lived a squeaky clean life to this very day. If you have money and you want to buy quality products and get value for your money, then buy the Martha Stewart brand. The Martha Stewart brand is well established for excellent quality.

July 15 2012 at 3:28 PM Report abuse -2 rate up rate down Reply
1 reply to gchu001's comment
C

Just more regurgitated nonsense from "gchu" who posts the same psychotic spam messages all over the Internet on every negative Martha Stewart article: "Martha Stewart has done nothing wrong, Martha Stewart is a victim, Martha Stewart had grossly incompetent legal representation," ad infinitum.

October 23 2012 at 11:08 AM Report abuse +1 rate up rate down Reply
nelson5300

Yes, she served time in prison... Those big bad Judges showed her didn't they? So why is it the "Big Boys" in the banking business who brought our entire economy down are still walking around free and get to keep all the big bucks they stole? So before you start shaking your finger at Martha think about all the crooks we have running our financial institutions and our government.... They just somehow escape judgement.

July 15 2012 at 2:13 PM Report abuse -1 rate up rate down Reply
hareglsl

Who buys her crap anyway????...there has to be some real mindless people out there that hold this malvolent egotist to such a high standard.

July 15 2012 at 2:08 PM Report abuse +2 rate up rate down Reply
JUDY

No one has to block her from selling anything to me. I wouldn't buy her products and if they were given to me as gifts I would regift them to someone else. Nothing but over-priced junk.

July 15 2012 at 12:52 PM Report abuse +3 rate up rate down Reply
you old fart

they are lucky she has crap

July 15 2012 at 9:47 AM Report abuse rate up rate down Reply
Larry

Is Macy's a convicted felon? Martha is.

July 14 2012 at 10:17 PM Report abuse +3 rate up rate down Reply
karuzia

her cookwear is junk

July 14 2012 at 9:26 PM Report abuse +4 rate up rate down Reply