Why JCPenney’s Shelves Might Start to Look Sparse

by Nate Wooley | March 5, 2013 11:45 am

Ailing retailer JCPenney (NYSE:JCP[1]) might be unable to put its products on its shelves.

The products — towels, cookware and more from Martha Stewart Living (NYSE:MSO[2]) — might be covered under an exclusive distribution agreement with Macy’s (NYSE:M[3]), reports The Wall Street Journal[4].

Judge Jeffrey Oing will hear oral arguments on Friday concerning whether JCPenney can sell the products. While the products are made by Martha Stewart Living, they do not bear her name or imprint and therefore JCPenney believes they can be sold.

The judge said the retailer took a gamble when it ordered the merchandise, the WSJ reports. Now it has to see if it gets to sell the goods after he rules. Oing insists he has the right to deny the retailer the ability to sell the products even after they have been delivered.

In a statement, Penney’s said it had no intent of interfering with Macy’s exclusive arrangement but that it doesn’t apply to the products in question. “Macy’s is attempting to gain through the lawsuit more rights than it actually has under its written contract,” the company said in a statement.

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Endnotes:
  1. JCP: http://studio-5.financialcontent.com/investplace/quote?Symbol=JCP
  2. MSO: http://studio-5.financialcontent.com/investplace/quote?Symbol=MSO
  3. M: http://studio-5.financialcontent.com/investplace/quote?Symbol=M
  4. reports The Wall Street Journal: http://online.wsj.com/article/APbd72856d56884e7b95ae7f0b968af57b.html
  5. Two Rank Retailers are Ruining the Sector for Everyone: http://investorplace.com/2013/02/two-rank-retailers-are-ruining-the-sector-for-everyone-jcp-shld-cvs-gps-tjx/
  6. JCPenney Accused of Concocting ‘Fake’ Prices: http://investorplace.com/2013/01/jcpenney-accused-of-concocting-fake-prices/
  7. PayPal Adds 7 New Bricks-and-Mortar Retailers: http://investorplace.com/2013/01/paypal-adds-7-new-bricks-and-mortar-retailers/

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