Martha Stewart’s Name to Get Scarce at J.C. Penney

Macy's is suing the chain over its licensing deal

   

Martha StewartA legal fight will keep most Martha Stewart-branded housewares and home decor products off the shelves at J.C. Penney (NYSE:JCP).

Despite the news, shares of J.C. Penney surged almost 6% in Tuesday morning trading on word that it will ditch its “no sales” policy, which fell flat with consumers.

Trade of the Day: JC Penney (JCP)
Trade of the Day: JC Penney (JCP)

The struggling department store chain had hoped that the decorating superstar’s line of home products would bring customers back to its stores. However, Macy’s (NYSE:M) sued J.C. Penney last year, claiming that its deal with Martha Stewart Omnimedia (NYSE:MSO), infringed on Macy’s own distribution deal for her product lines, the New York Post noted.

In December 2011, J.C. Penney signed a ten-year licensing deal with MSO that included mini-Martha Stewart shops in its department stores. Under terms of the deal, J.C. Penney took a 17% stake in the domestic diva’s company.

As a result of the dispute, the Martha Stewart brand will be limited on J.C. Penney shelves while the matter plays out in a New York court, starting next month.

J.C. Penney saw its sales plunge after it adopted a “no sales” policy under the direction of CEO Ron Johnson, who formerly ran Apple‘s (NASDAQ:AAPL) brand name store chain.


Article printed from InvestorPlace Media, http://investorplace.com/2013/01/martha-stewarts-name-to-get-scarce-at-j-c-penney/.

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