New York -- Hudson + Broad, a New York City-based visual merchandising firm, is suing J.C. Penney Co. for $40 million. H+B is seeking $20 million in compensatory damages and an additional $20 million in punitive damages.
H+B began legal proceedings on Wednesday against J.C. Penney in the U.S. District Court for the Southern District of New York. The company said in the complaint that it is the creator of the unique oversized plexiglass LED square fixture that J.C. Penney has installed in its Manhattan store and executive offices in Plano, Texas. The J.C. Penney employed H+B to create a new plexiglass lighting fixture to appear near the entrance of all stores, according to the report, but the retailer reneged on the agreement, the design firm alleges.
The New York-based company said it designed a fixture that changes colors, one for each month of the year to match J.C. Penney's new marketing message, The Dallas Morning News reported. The company said J.C. Penney ordered 1,879 units to be installed in 700 of its department stores. So far, the remote controls have all been manufactured, according to a spokesman for Hudson + Broad.
Then J.C. Penney cancelled the order and said it would source the fixtures from another company, according to the report.
“Top level executives at J.C. Penney, including those who report directly to CEO Ron Johnson, engaged Hudson + Broad to develop this unique fixture with the explicit promise that this proprietary product, if accepted, would only be ordered from us and that our concept would not be misappropriated and bid out to other manufacturers,” said James Maharg, president of H+B, in a statement. “Yet J.C. Penney is doing exactly what it promised it would not do — which is a huge disappointment from a company claiming Fair And Square as its image.”
J.C. Penney said it does not comment on pending litigation, the report said.