Dive Brief:
-
J.C. Penney may not be off the hook for certain provisions of its merchandising contract with Martha Stewart after all, with a New York appeals court’s affirmation Thursday of a lawsuit brought by Macy’s.
-
Macy’s had said that Penney breached confidentiality provisions of its contract with Martha Stewart Living Omnimedia that add up to unlawful competition, but a lower court judge in June had dismissed that claim.
-
Also in June, however, New York State Supreme Court justice Jeffrey Oing ruled that J.C. Penney Co. interfered with a contract between Martha Stewart Living Omnimedia Inc. and Macy’s by entering a deal to sell Stewart’s home goods and called the Penney-Stewart deal a “colossal failure.” Macy’s had settled with Martha Stewart Living Omnimedia in January 2014.
Dive Insight:
This is a “not so fast” ruling against J.C. Penney over Martha Stewart Living-branded goods that keeps this particular contract dispute alive. Last year the judge, in ruling in Macy’s favor, imposed sanctions that he said should act as a deterrent.
But J.C. Penney has had good news this week, too. The retailer seems to be maintaining some momentum in its turnaround, reporting a 4.4% Q4 same-store sales increase, beating expectations, and a net sales increase of 3% to $3.89 billion, thanks to demand for household items, apparel, and jewelry over the holidays. Profits were dinged somewhat by promotions and investments in new stores, the company said.
