Martha Stewart Living and J.C. Penney Continue to Battle over Right to Sell Goods

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Everybody wants a piece of Martha Stewart. That’s why two retail giants are going to war over the rights to sell goods emblazoned with her name and image. In the latest battle for the rights to merchandize the lifestyle icon, J.C. Penney won a key victory over Macy’s to determine who can sell Martha Stewart goods.

In 2006, Macy’s signed a contract with Martha Stewart Living Omnimedia to produce, package, market and sell Martha Stewart Living branded goods at all of their retail outlets. The contract’s terms extend to 2018, and Macy’s claims that it gives them the exclusive rights to the Martha Stewart name in certain categories like bedding, bath and tableware.

  

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Unbeknownst to Macy’s, Martha Stewart Living Omnimedia also signed an agreement with Macy’s competitor J.C. Penney to create Martha Stewart branded stores within J.C. Penney outlets across the country. Once Macy’s got wind of this deal, they promptly took legal action, successfully prohibiting J.C. Penney from selling any of the $100 million in inventory they had already purchased for the Martha Stewart initiative.

The latest decision, which was reported by Reuters, puts J.C. Penney in a position to sell that merchandise as long as it wasn’t branded as Martha Steward Living. Barring any appeals, of which many can be expected, unbranded Martha Stewart merchandise can indeed be sold by J.C. Penney under the label “JCP Everyday.” But don’t rush out to a local shopping mall in search of Martha Stewart-affiliated tea candles or lemonade pitchers just yet, as Macy’s has already announced their intention to appeal Justice Jeffrey Oing’s decision.

Since the decision, Macy’s has decried Oing’s ruling, saying that the judge “erred in several significant respects.”

It may seem like risky business for J.C. Penney to sign a spokesperson that is already engaged in a long-term, exclusive contract with a rival company, but J.C. Penney has been no stranger to risky moves in the last few years. Their former CEO, Ron Johnson, has been making aggressive and unusual business moves, including the deal with Martha Stewart Living Omnimedia, which was worth it in the short term, but not in the long term. Johnson was ousted from the company last week.

Oing is also overseeing a dispute between Macy’s and Martha Stewart Omnimedia which will determine if Stewart’s company breached its contract with Macy’s by signing the deal with J.C. Penney.