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

Macy's is suing the chain over its licensing deal


martha stewart 300 Martha Stewarts Name to Get Scarce at J.C. PenneyA 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.

JCPenney185 Martha Stewarts Name to Get Scarce at J.C. Penney
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.

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