Dive Summary:
- Theodore Grossman, a lawyer for Macy's Inc., argued before a New York State judge Wednesday that J.C. Penney Co. used a store-within-a-store loophole to bring Martha Stewart-branded products to Penney, leading Martha Stewart Living Omnimedia Inc. to breach its long-running contract with Macy's.
- Lawyers for Penny and Martha Stewart Living countered that the Macy's contract doesn't bar Martha Stewart Living from sharing designs with partners, that exclusivity is limited to products appearing under the Martha Stewart Collection trademark at Macy's and that the Macy's contract allows Martha Stewart Living to sell similar products in Martha Stewart stores.
- Macy's filed the breach of contract suit against Martha Stewart Living in New York State Supreme Court, as well as a separate lawsuit against Penney alleging that the company interfered in its relatinship with Martha Stewart Living and engaged in unfair business practices, and a bench trial for both suits before New York Supreme Court Justice Jeffrey Oing is expected to last 2 1/2 weeks.
From the article:
... Mr. Grossman said that, following initial softness, sales of the Martha Stewart brand have outperformed Macy's overall sales for the past five years. Now, J.C. Penney and Martha Stewart Living are using the store-within-a-store concept as a loophole to breach the Macy's agreement, the lawyer said. "It all boils down to one thing: carpentry," he added. ...
