Macy's Sues Martha Stewart Living Omnimedia over J.C. Penney's Deal
02.01.12Claiming a breach of contract, Macy's sued Martha Stewart Living Omnimedia Inc. after the latter struck a deal with J.C. Penney's to begin carrying Martha Stewart Collection items. Macy's contends the new deal with J.C. Penney's covers products that were to be exclusive to Macy's under its agreement with Martha Stewart Living. In its complaint Macy's recites that Martha Stewart Living provided it the exclusive right to sell these products and as a result the new deal with J.C. Penney's the contract has been violated. Macy's has sought both a preliminary and a permanent injunction to bar Martha Stewart from violating the contract. Martha Stewart Living Omnimedia responded to the lawsuit by disclosing that in its view the contract with Macy's has a loophole which allows the company to sell any product from a "Martha Stewart Living Store" which is precisely what the agreement with J.C. Penney's accomplishes. In December 2011 J.C. Penney's took a 17% stake in Martha Stewart Living and announced plans to open shops within its stores that sell Martha Stewart Living products. For reasons of confidentiality, initial suit papers were filed under seal of court in Manhattan.