Martha vs. Macy’s: Macy’s Prevails in Initial Ruling from State Judge

Not a good day for J.C. Penney, I’m afraid. A NY state state judge has intervened on behalf of Macy’s to halt the planned sale of Martha Stewart-branded items at J.C. Penney next spring. While the judges ruling is not final yet, he indicated that the facts of the case tilted in Macy’s favor.

J.C. Penney has responded that it will comply with the judge’s ruling, but that it will proceed with the launch of the Martha Stewart store-within-stores concept and will sell only those products not specifically covered by its agreement with Macy’s, which runs through 2018.

In the past week, there has been notable movement at MSLO: Martha herself was named Founder and Chief Creative Officer, Lisa Gersh was named CEO, and the agreement with J.C. Penney was amended to show higher anticipated sales figures for the joint venture and to include new categories of products. It is not hard to imagine that these developments, coming just days before the judge’s ruling, are intended to better position MSLO as it works to resolve its agreements with both retailers. Some have predicted a settlement with Macy’s that would free Martha from her contract and allow her to devote the company’s full attention and creative energies to its new relationship with J.C. Penney where it will have much more say in the manner in which Martha’s products are merchandised in the stores. FOMs: Stay tuned–this story isn’t over! Looks like, for now, we can look forward to Martha Stewart products being available at TWO retailers starting in 2013.

From Reuters:

A state judge on Friday temporarily blocked plans by Martha Stewart Living Omnimedia to sell certain branded products at J.C. Penney stores.

The preliminary injunction was a win for Macy’s (M), which has sued Martha Stewart Living (MSO) claiming it has exclusive rights to sell certain Martha Stewart products including soft furnishings, dinnerware and cookware.

In issuing the preliminary injunction, New York State Supreme Court Justice Jeffrey Oing said Macy’s had shown likelihood of ultimate success in its lawsuit. “The scale tilts in favor of Macy’s,” the judge said.

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