You choose, we deliver
If you are interested in this story, you might be interested in others from The Journal Gazette. Go to www.journalgazette.net/newsletter and pick the subjects you care most about. We'll deliver your customized daily news report at 3 a.m. Fort Wayne time, right to your email.

Business

  • Dollar store rejects bid from rival
    Family Dollar has rejected a takeover bid from dollar store competitor Dollar General, saying it would be too hard for the deal to pass antitrust regulators.
  • Jell-O can't stop slippery sales slide
    Jell-O has lost its jiggle and nobody knows how to fix it.
  • Mortgage aid with a snare
    WASHINGTON – The $17 billion settlement that Bank of America reached with the Department of Justice on Thursday sets aside billions in aid for some troubled homeowners.
Advertisement

Macy CEO testifies in Stewart legal fight

Lundgren

– Macy’s CEO Terry Lundgren testified on Monday that he hung up on home diva Martha Stewart after she called to inform him on Dec. 6, 2011 that the company that bears her name had inked a deal with J.C. Penney to open shops within most of the chain’s stores.

He hasn’t spoken to her since, even though the two used to be good friends.

“I was sick to my stomach,” Lundgren testified on Monday in New York Supreme Court. “I can’t remember hanging up on anyone in my life.”

The testimony comes as Macy’s Inc. and J.C. Penney Co. duke it out in court over the partnership with Martha Stewart Living Omnimedia. The trial, which began Wednesday, focuses on whether Macy’s has the exclusive right to sell Martha Stewart branded cookware, bedding and other products. Other key witnesses expected to take the stand this week include Penney’s CEO Ron Johnson and Martha Stewart, who founded Martha Steward Living.

Martha Stewart’s brand has been important to Macy’s. Under Lundgren’s leadership, Macy’s has focused on building exclusive brands like Martha Stewart that are not carried by rivals to get shoppers to the store.

In the home area, exclusivity is key. Lundgren testified on Monday that Macy’s had built the Martha Stewart brand to be the biggest in its home business. Sales last year were up 8 percent, double the rate for the entire company.

Lundgren said Macy’s has spent 40 percent of its overall marketing on the Martha Stewart brand even though the home category represents 17 percent of sales. He said that having Penney have access to the brand will not be good for the business.

His testimony is a culmination of a legal battle between the three companies that started in 2011. Macy’s sued Martha Stewart Living in January 2011, saying the company breached a long-standing contract when it penned the deal with Penney, which invested $38.5 million in a nearly 17 percent stake. In a separate lawsuit, Macy’s sued Penney claiming it had no regard for the Macy’s contract and that Johnson had set out to steal the business that it had worked hard to develop.

Advertisement