Martha Stewart, J.C. Penney revise partnership agreement in Macy's dispute
By Karen Freifeld
NEW YORK (Reuters) - J.C. Penney Co Inc (JCP.N: Quote) and Martha Stewart Living Omnimedia MSO.N on Monday announced a revised agreement that eliminates Stewart's products in home goods categories to which rival Macy's Inc (M.N: Quote) claims exclusive rights.
The amended deal calls for the domestic doyenne's company to design Martha Stewart-branded products for J.C. Penney in window treatment, holiday and other categories not claimed by Macy's. Penney also gave up its 17 percent stake in Martha Stewart's company.
Macy's sued Penney and Martha Stewart Living after the two announced a partnership in December 2011. Macy's said the agreement breached its contract with Martha Stewart that included exclusive rights to Martha Stewart-branded cookware, bedding and bath products.
"It's a total victory for Macy's," attorney Ted Grossman, who represents Macy's, said of the revised agreement between Penney and Martha Stewart. "They obviously knew they had lost the trial, just as we clearly believed that we had won."
Penney's stock hit a more than 30-year low on Monday, closing at $6.42 on the New York Stock Exchange after falling as low as $6.27. An analyst had slashed her price target on shares to one dollar, citing concern the retailer "may engage in financial restructuring in 2014."
Former Penney Chief Executive Officer Ron Johnson viewed Martha Stewart as key to his vision for remaking the struggling retailer. Johnson, who failed to win over shoppers and investors, was ousted in April.
"We are happy to be moving forward," Penney Chief Executive Mike Ullman said in Monday's statement announcing the revised agreement.
Johnson, Martha Stewart and Macy's Chief Executive Terry Lundgren all took turns on the witness stand during the trial in New York state court. Continued...