(Reuters) - J C Penney Co Inc (JCP) is scrapping a line of products designed by Martha Stewart that rival Macy's Inc (NYS:M) has claimed violated its contract with the home goods doyenne, the New York Post reported, citing sources familiar with the matter.
Penney's Chief Executive Mike Ullman made the decision even though a New York judge has yet to rule on the lawsuit filed by Macy's to stop Penney from selling the products, the New York Post said. (http://link.reuters.com/gek82v)
Penney did not respond to requests for comment. Martha Stewart Living Omnimedia (MSO) said in a statement cited on CNBC Thursday afternoon it has no intention of ending the partnership.
Macy's sued Penney and Martha Stewart Living Omnimedia last year over a deal announced in 2011 to open shops selling Stewart-designed home goods at Penney stores as part of ex-CEO Ron Johnson's vision for a new home section.
Macy's has claimed exclusive rights to Martha Stewart cookware, bedding and bath products under a partnership that began in 2006.
The department store chain sued Stewart for breach of contract and Penney for interfering with its contract with Stewart. The lawsuits were combined last year.
The New York Post report also said Ullman may scrap Penney's production of Stewart-branded goods not covered by the Macy's lawsuit. These include window treatments, rugs, crafts and pantry items.
Penney's shares rose 2 percent to $13.79 in late morning trade on the New York Stock Exchange. Macy's shares were up 1.74 percent to $45.60, while those of Martha Stewart Living Omnimedia were down nearly 5 percent at $2.34.
(Reporting By Maria Ajit Thomas in Bangalore; Dhanya Skariachan, Jennifer Saba and Phil Wahba in New York; Editing by Sriraj Kalluvila and Chris Reese)