Looks like Martha Stewart bet on the wrong guy when she tried to slip out of an exclusive deal with Macy's CEO Terry Lundgren.
Less than two years after Martha Stewart Living Omnimedia (MSO) and J.C. Penney (JCP) formed a partnership to create revolutionary stores within a store, it appears the struggling retailer has sent Martha packing. Officially, both companies announced they've reached an agreement. Penney's move, which severely reduces the length and depth of its relationship with Stewart, comes just days before a Manhattan court judge was set to rule on a case brought by Macy's (M), which claimed Stewart selling product through J.C. Penney violated an exclusive deal Stewart had with Macy's.
The "revised agreement" between Stewart and J.C. Penney means Penney will not sell kitchen, bed or bath products designed my Martha Stewart and currently being sold under the "JCP Everyday" brand.
Stewart isn't being ousted from J.C. Penney entirely. The amended agreement allows Penney to carry Stewart-designed window treatments and hardware, lighting, rugs and holiday goods under a "MarthaHome" brand through 2017.
Apparently everything else, including Martha's dignity, will continue to be sold at Macy's which has renewed its contract with Stewart.
The legality of the deal struck by former J.C. Penney CEO Ron Johnson and Stewart hinged on the argument that the Martha Stewart brand wouldn't be selling goods through J.C. Penney per se, but that Penney would be opening what amounted to free standing Martha Stewart stores that happened to be located on the same floor as the housewares department of existing J.C. Penney.
Macy's CEO Terry Lundgren was unamused. As the hearing dragged on in a New York courtroom Johnson, Lundgren and Stewart all took the stand to tell their version of events. In borderline salacious often weird testimony Lundgren admitted to hanging up on Stewart when she called to tell him of her deal with J.C. Penney and Johnson. Lundgren was reportedly infuriated Stewart would sign a deal with another department store after Macy's had stuck by the occasionally struggling Stewart brand for years.Read More »from Domestic Diva Dumped! Martha Stewart’s Retail Love Triangle Ends in Tears