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Macy's, JC Penney battle over right to sell Martha Stewarts merchandise

RBR Staff Writer Published 21 February 2013

US-based department store chains Macy's and JC Penney are locked in a courtroom battle over the exclusive rights to sell Martha Stewart Living Omnimedia (MSLO) merchandise.

Macy's attorney Theodore Grossman told the New York State Supreme Court in Manhattan that rival JC Penney had colluded with Martha Stewart to develop a partnership that was detrimental to Macy's interests and contrary an its existing contract with MSLO.

The attorney alleged that JC Penney sought loopholes in Macy's contract to find a way to retail MSLO merchandise at its outlets.

"We're here to protect our rights. Rights that we paid for. Rights that we worked on. Rights that we took tremendous risks for," explained Grossman to Justice Jeffrey Oing.

In January 2012, Macy's has filed a petition against MSLO for breach of the exclusive retailing contract after the latter approved JC Penney's decision to sell merchandise worth $282.9m.

Later it also sued JC Penney of involving in unfair competition.

Macy's also claimed that MSLO manipulated the terms of contract by opening two boutiques at JC Penney's stores; although the contract provisioned for two standalone stores that had to be owned by MSLO.

Grossman has told the court that JC Penny CEO Ron Johnson and Martha Stewart had conspired against Macy's by not informing the retailer of the contract until the eve of announcement.

"Its agenda was to market to both stores. Mr. Johnson had a different agenda. He wanted to supplant Macy's," argued Grossman.

Denying any wrongdoing JC Penney lawyer Mark Epstein stated that it fully honored Macy's contract with MSLO.

The trail is expected to run for two weeks until 8 March 2013.