Macy's: Martha Stewart, JCP deal not 'a good thing'

NEW YORK — A New York state Supreme Court filing on Monday disclosed that Macy’s Inc. is suing Martha Stewart Living Omnimedia Inc. for breach of contract after Martha Stewart set up a new deal last December with JCPenney to sell products at its stores.

According to Macy's, Martha Stewart Living granted it product exclusivity under a 2006 agreement. JCPenney, which acquired a 16.6% stake in the company in December, plans to open Martha Stewart Living in-store shops, beginning in 2013, which violates that exclusivity, said Macy’s.

Macy's is seeking a preliminary injunction stopping Martha Stewart from violating the contract. It claims that a renewed contract with Martha Stewart extended its exclusivity until January 2018.

Plans for Martha Stewart's partnership with JCPenney include distinct Martha Stewart retail stores inside the majority of JCPenney department stores, the company said. In addition, these stores will staffed by trained associates that can offer customers advice on how to best use the products.

The agreement also includes the launch of an e-commerce site in 2013 that will offer Martha Stewart expertise and enable consumers to purchase a wide range of home and lifestyle products, including those sold in the Martha Stewart stores inside JCPenney, and other merchandise designed or selected by Martha Stewart. MSLO is expected to receive in excess of $200 million from JCPenney over the initial 10-year contract period.