Macy’s Suing J.C. Penney Over Martha Stewart Exclusivity

Aug 18, 2012 1:30 AM  By

Macy’s has filed a lawsuit against one of its major competitors, J.C. Penney, over who holds exclusive rights to sell certain Martha Stewart Living products.

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According to the lawsuit, which was obtained by Macy’s spokesperson Jim Sluzewski, Macy’s and Martha Stewart Living Omnimedia made a business deal back in 2006 which granted Macy’s an exclusive license to manufacture and sell certain Martha Stewart products.

That agreement, the suit states, also prohibited MSLO from entering into any other agreement with any third party retailer. However, in December of 2011 J.C. Penney and MSLO issued a statement announcing that the two had entered into a “strategic alliance” with each other. In the suit, Macy’s is claiming that alliance was a violation of its original agreement with MSLO.

This isn’t the first legal wrangling between the three companies, the courts granted Macy’s a motion for preliminary injunction in July that temporarily stops MSLO from doing business with JCP, a decision MSLO appealed last week.

In this current lawsuit, Macy’s is claiming the exclusive agreement it made with MSLO helped it distinguish itself from its competitors and help make the Martha Steward brand “the core of the Macy’s home product strategy” and be a significant presence in all Macy’s stores.

But according to Robert Passikoff, president of Brand Keys, the best way to distinguish yourself from other retailers is to be original and sell original products. “Retailers need to learn that you can’t rely on someone else’s brand to be the infrastructure that supports you,” Passikoff said in a recent phone interview.

Macy’s is seeking unspecified damages, a preliminary injunction “preserving the status quo” but also asking the courts to stop JCP from using Martha Stewart’s name in connection with its brand.

When asked to comment on the suit, in a statement, Sluzewski said “Macy’s has an exclusive right to use the name and likeness of Martha Stewart in connection with the manufacture, marketing, distribution and sale of products in contractually defined categories, including housewares, cookware, soft home (bedding, bath and kitchen textiles), home décor and certain furniture.”

“Macy’s plans to continue to fully support its exclusive Martha Stewart-branded product sold in its stores and online under its contract with MSLO, which currently extends through January 2018. Given that this is a matter in litigation, the company will not comment further,” his statement said.

J.C. Penney could not be reached for comment regarding the lawsuit.

Erin Lynch is the associate editor at Multichannel Merchant. Erin can be reached at 203-358-3755 or by emailing her at erin.lynch@penton.com. You can also follow her on Twitter at @LynchMCM or on LinkedIn.