NEW YORK, Feb 2 (Reuters) - Martha Stewart Living
Omnimedia's contract with Macy's to exclusively sell certain products has a loophole that will let the company sell in J.C.
Penney Co stores, according to the home-goods company.
The loophole is that the company can sell any product from a
Martha Stewart Living Store, the company said.
J.C. Penney in December took nearly a 17 percent stake in
Martha Stewart Living and announced plans to open shops within
its stores that sell Martha Stewart-branded goods, starting in
Macy's sued Martha Stewart Living, accusing the company of
breach of contract for entering the agreement with Plano,
Texas-based J.C. Penney.
Macy's claims Martha Stewart Living granted it the exclusive
right to manufacture and sell the Stewart-branded goods in
Macy's lines under a 2006 agreement that, with a renewal, runs
Macy's is seeking a preliminary injunction to stop Martha
Stewart from taking any action to implement its deal with J.C.
Penney to prevent "irreparable injury to Macy's."
"Billions of dollars of sales are involved," Macy's said in
its Feb. 1 complaint, filed in New York state Supreme Court in
According to the lawsuit, Martha Stewart Living confirmed
at a Dec. 15 meeting that the planned "Martha Stewart stores"
within J.C. Penney would be operated by J.C. Penney employees
and that all sales would be made by J.C. Penney.
The lawsuit was filed with certain information redacted,
including what the "Martha Stewart Collection" generates in net
sales at Macy's.
Macy's said Martha Stewart "compounds the injury" by
entering into the agreement with J.C. Penney, which it describes
as "a less upscale retailer."
"We value our relationship with Macy's and are confident
that we are not breaching the terms of our agreement," Martha
Stewart Living said in a statement.
"MSLO believes it's good for our partners, our consumers
and our brand to have a wide range of Martha Stewart products
available in a wide variety of top retailers," the statement
J.C. Penney's and Macy's did not immediately respond to
requests for comment.
The case is Macy's Inc. v. Martha Stewart Living Omnimedia,
Inc., 650197/2012, New York state Supreme Court (Manhattan).
(Reporting by Karen Freifeld)
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