JCPenney will be allowed sell to Martha Stewart-designed products in stores as long as they don’t bear her name, a judge ruled today.
Judge Jeffrey Oing in New York State Court “did not grant Macy’s Inc.’s request to broaden its preliminary injunction against Penney’s and Stewart,” reports Alexandra Steigrad at Women’s Wear Daily.
“Today’s decision allows Penney’s to unpack warehouses filled with unbranded, Stewart-designed goods, and begin selling them,” Steigrad reported. The department store won’t be allowed to sell branded goods, which JCPenney had previously agreed to.
The decision is a big win for JCPenney, which desperately needs Martha Stewart to revamp its home line and get customers in stores. The chain is in turmoil after failed CEO Ron Johnson left this week.
Macy’s said it plans to appeal the decision, although JCPenney CEO Mike Ullman was reportedly seeking a truce earlier this week.
Leaked details of that proposed settlement revealed that JCPenney would get rid of its 10-year, $200 million contract with Stewart. However, JCPenney asked to be able to sell the Martha Stewart products it already had available for a set amount of time, like six months.
Macy’s, which has had a deal with Stewart for several years, sued her company for breach of contract shortly after she announced the JCPenney line. The department store also sued competitor JCPenney.
The companies spent several weeks in mediation, but were unable to reach an agreement.
Macy’s CEO Terry Lundgren told the New York State Court in Manhattan that her deal with JCPenney ended their friendship.
“I was completely shocked and blown away,” Lundgren said. “I was literally sick to my stomach.”
Stewart claimed in her testimony that Macy’s didn’t give her the influence she was seeking, shooting down ideas she had for luxury bath and bridal crystal lines.
The line is expected to be worth up to $500 million for Stewart, whose own company has struggled financially in recent years.
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