Macy's Sues J.C. Penney Over Martha Deal

NEW YORK-Coupled with its court action against Martha Stewart Living Omnimedia (MSLO), Macy's has filed suit against J.C. Penney over the agreement between the retailer and MSLO to open Martha Stewart home shops in J.C. Penney stores.

Macy's had sued MSLO concerning this deal in January. J.C. Penney and MSLO announced their partnership in December, which calls for the opening of Martha Stewart home shops in the majority of J.C. Penney stores along with the creation of an e-commerce site devoted to Martha Stewart home products. The in-store shops are scheduled to open in February 2013, and the site will also debut next year.

In the filing, a copy of which was sent to HFN, Macy's said, "J.C. Penney has tortiously interfered, and continues to tortiously interfere, with a contract that Macy's validly entered into with Martha Stewart Living Omnimedia Inc. (MSLO). J.C. Penney knew that such a contract existed, and nonetheless induced MSLO to materially breach that contract.

"Billions of dollars of sales are involved," the filing went on to say. "J.C. Penney has no justification for its unlawful conduct, which is transparently designed to eliminate the competitive advantage that Macy's enjoys in the area of home products by virtue of its exclusive relationship with MSLO."

In a statement also given to HFN, Macy's said, "On July 13, the Supreme Court of the State of New York issued a preliminary injunction preventing MSLO from allowing the manufacture, marketing, distribution or sale of any Martha Stewart-branded product in these categories through another retailer. The lawsuit...seeks to expand injunctive relief to J.C. Penney and seeks to have J.C. Penney pay damages for its tortious interference with the contract between Macy's and MSLO."

The statement added that Macy's plans to continue to support the Martha Stewart Collection product sold under its MSLO contract, which currently extends through January 2018.

As of this morning, J.C. Penney had not responded to requests for comment.

HFN Staff | News & Commentary

HFN provides detailed information on the key home classifications: Housewares, Tabletop, Floor Covering & Rugs, Furniture, Home Textiles, Lighting, Home Decor, Mattresses & Bedding, Gifts, Major Appliances and Consumer Electronics as well as Business, Finance and Retail.

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