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JC Penney Looks To Sever Merchandising Agreement With MSLO

Thursday September 26th, 2013 - 4:22PM


J.C. Penney Co.is trying to sever its merchandising agreement with Martha Stewart Living Omimedia, that has been the subject of a court battle with Macys, the Wall Street Journal reported.

Former JC Penney Chief Executive Ron Johnson signed a deal in December of 2012 to sell housewares, bedding and other products by MSLO. Macy's contends the deal violates an exclusive agreement it has with Martha Stewart Living to sell similar products.

A ruling in the case by Justice Jeffrey Oing of the New York State Supreme Court was expected this fall. In a special hearing held on Wednesday to discuss a report that JC Penney CEO Mike Ullman had decided to remove Stewart's collection in the company's stores, Oing said he planned to issue a decision "hopefully in a shorter time, rather than a later time."

According to Wall Street Journal sources, the companies have had discussions about modifying the relationship. Under one scenario, Penney would exit categories in which it has a direct conflict with Macy's, including bedding, bath and housewares, which can't carry the Martha Stewart brand, one person familiar with the situation said. 

"J.C. Penney remains one of our many retail partners," Martha Stewart spokeswoman Claudia Shaum said. "Our agreement with them is in force, and we have no intention of ending it."