Macy's is her biggest contract to date, with an estimated $300 million in sales. When Stewart told CEO Terry Lundgren about her plans with JCPenney, he hung up on her and quickly announced that the company was suing to keep the line off shelves.
Why would Stewart risk alienating her biggest partner over a collaboration with JCPenney?
Because CEO Ron Johnson made her an offer she couldn't refuse.
"Amongst ourselves we were not always thrilled with the fact that Macy's wasn't increasing our exposure in stores," Stewart said in New York State court today. "My dream was to have my own store at JCPenney and Macy's never offered us that despite the fact that we had thousands of products."
Johnson aggressively courted Stewart, promising her more dominance and freedom at JCPenney. She said she saw him as a retail "visionary."
The JCPenney executive even told Stewart that he saw a collaboration with her as a way to " dramatically enrich the lives of every American homeowner."
At Macy's, Stewart was one of many vendors. But Johnson promised her more dominance.
He said in an email that she could make $500 million from the deal if it went well.
Meanwhile, Stewart said that Macy's shot down some of her ideas for organic bedding and high-end crystal for brides. She said that she had hoped to make $400 million at Macy's by 2012, but the number came out closer to $300 million.
Stewart needed growth for her company, Martha Stewart Living Omnimedia.
Ultimately, JCPenney was the company who offered the chance.
While Stewart's line might not make it to shelves this spring, it's easy to see why she took the gamble.
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