JCP, MSLO Amend Agreement for Martha Stewart Products
July 13, 2012,
NEW YORK-J.C. Penney and Martha Stewart Living Omnimedia (MSLO) have amended their original agreement calling for the establishment of Martha Stewart home stores within J.C. Penney stores.
According to a filing with the U.S. Securities and Exchange Commission, the amendment adds certain undefined products to the offerings that will be available in Martha Stewart shops at J.C. Penney stores. It also adds certain, and again undefined, product categories to the definition of non-exclusive product categories. It also modifies the products that will be sold in one of the product categories, again not specified, established in the original agreement.
As of the result of this amendment, the filing said, the minimum guaranteed payments by J.C. Penney to MSLO from sales commissions, combined with the design fee and the annual marketing spend, will increase by $110.5 million to total $282.9 million during the 10-year term of the original agreement.
The filing added that, in regard to the sales of products in the party-products category, MSLO will have the right to terminate J.C. Penney's right to sell and distribute these products on six months' prior notice to the retailer, beginning Feb. 1, 2016. This termination would not affect the minimum guaranteed payments for sales commissions under the original agreement, the filing said.
J.C. Penney and MSLO announced their collaboration last December, which called for the establishment of Martha Stewart home stores within J.C. Penney stores and the creation of a separate e-commerce website devoted to Martha Stewart products.