Penney, Martha Stewart Living scale back partnership in new agreement

New York -- Martha Stewart Living Omnimedia and J.C. Penney Co. on Monday announced a revised commercial agreement covering their licensing and design partnership. The new agreement scales back Penney’s partnership with Martha Stewart Living.



It was not clear how, if at all, the revised agreement could affect the companies’ ongoing lawsuit with Macy’s.



Under the new agreement, Penney will sell a smaller selection of Martha Stewart Living products, like window treatments, rugs and party supplies, categories that are not in contest by Macy's. Also, Martha Stewart Living will receive fees, royalties and the 11 million shares of its stock that Penney now holds, and Penney also will no longer have representation on the Martha Stewart Living board.



Penney CEO Myron stated: “We are happy to be moving forward and continuing to provide our customers with quality products from the MarthaHome collection, which includes MarthaWindow, one of our best-selling lines of window treatments.”



Macy’s said the new agreement between Penney and Martha Stewart is “a tacit admission by both Penney and Martha Stewart Living that Macy’s is the only store that can sell Martha Stewart bed, bath, and kitchen goods,” the Dallas Morning News reported.



“The contract that Penney and Martha Stewart Living entered into to sell Martha Stewart bed, bath, and kitchen goods at Penney was illegal,” Macy’s said in a statement. “It is a great shame that Macy’s had to expend time, money, and the diversion of its resources in order to protect its rights. Macy’s claims for the substantial damages it suffered as a result of Penney’s interference with Macy’s contract and Martha Stewart Living’s breach remains before the court.