NEW YORK – Let the pots and pans fly.
Two of the nation’s biggest department stores – J.C. Penney and Macy’s – began to duke it out in the New York State Supreme Court over the right to sell Martha Stewart merchandise.
At the heart of the trial, which began Wednesday, is whether Macy’s has the exclusive right to sell Martha Stewart-branded products in such categories as cookware, bedding, and bath. Company founder Martha Stewart, J.C. Penney’s CEO Ron Johnson and Macy’s CEO Terry Lundgren could be called to testify during the trial.
In December 2011, J.C. Penney announced a partnership in which it would open Martha Stewart mini-shops in most of its stores, beginning this spring. It also announced that it had acquired a 16.6 percent stake in Martha Stewart Living. The deal is part of Penney’s plan to revive the struggling department store under Johnson’s leadership.
Macy’s sued Martha Stewart Living, saying that it had exclusive rights on certain of its products until 2018. The pact goes back to 2007.
“Macy’s is the victim here,” Macy’s spokesman Jim Sluzewksi told The Associated Press. “(J.C. Penney) has wrongfully and illegally interfered with our relationship with (Martha Stewart). Our company has, in good faith, invested significant sums, taken risks and endured a period of disappointing results in order to rebuild the Martha Stewart brand and grow it in important product categories. We invested for the long-term. (Penney) is trying to harvest the field planted and cultivated by Macy’s.”
Macy’s, based in Cincinnati, has claimed in court documents substantial damages and said the maneuver by J.C. Penney “threatens to inflict incalculable further harm on Macy’s. Billions of dollars of sales are involved.”
Macy’s is also trying to stop Martha Stewart from providing designs to J.C. Penney even if it gets rid of the Martha Stewart moniker.
Last summer, Macy’s won a preliminary injunction against Martha Stewart Living that would prevent it from selling housewares and other exclusive products at J.C. Penney.
Supreme State Court Judge Jeffrey Oing did grant Penney permission to open Martha Stewart shops, as long as the items under the exclusive contract with Macy’s are not sold in them.
