Martha vs. Macy’s: Martha Wins Skirmish

Team Martha has won a procedural victory in the competing lawsuits underway between MSLO and Macy’s. Here’s a brief on what’s going down: Macy’s sued MSLO after Martha’s partnership with J.C. Penney was announced, claiming they had an exclusive agreement with MSLO. MSLO countersued, claiming Macy’s was not properly merchandising Martha’s products in their stores, but was using her brand as a “loss leader” to bring traffic into Macy’s stores where customers would find other house brands (which are more profitable for Macy’s) better stocked and merchandised. Boo, hiss on Macy’s!

MSLO wanted Macy’s CEO, Terry Lundgren, to be deposed under oath to answer their claim. Macy’s refused and has been trying to keep their CEO out of the court case and away from providing any testimony under oath. Yesterday, the judge sided with Team Martha, and Lundgren will be deposed on July 3! The court will rule on a preliminary injunction to halt the Martha-J.C. Penney partnership on July 13.

The nature of Martha’s agreement with J.C. Penney, where MSLO has more say over the manner in which Martha’s products are merchandised and presented in the dedicated “stores within a store”, certainly supports the claim that there was dissatisfaction with the way her products were handled by Macy’s. I think it will be fascinating to see sales figures for the periods when Martha Stewart products are available at both Macy’s and J.C. Penney stores. (Martha’s contract with Macy’s runs through 2014.)  Then it will be clear to see if merchandising can account for better sales figures.

You can read about my own Macy’s Shopping Expedition here.

From the Bloomberg website:

Martha Stewart Living in May asked New York State Supreme Court Justice Jeffrey Oing to order Macy’s to make Lundgren available for a deposition as soon as possible, saying he has “unique, relevant personal knowledge.” Macy’s asked Oing to deny the request, saying it was “unreasonable and untimely.”

via Macy’s Lundgren to Be Deposed in Martha Stewart Lawsuit – Bloomberg.

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