Saturday, April 13, 2013

Martha Stewart loses bid to dismiss Macy's contract claim

After a rough week, J.C. Penney finally got some good news on Friday.

A New York judge gave the retailer the go-ahead to sell home goods designed by Martha Stewart under a "JCP Everyday" label, pending the outcome of an ongoing trial.

Justice Jeffrey Oing, who last year blocked J.C. Penney from selling the goods under a Martha Stewart label, refused Macy's Inc's request to expand the block.

The ruling was an interim victory for embattled J.C. Penney, which has warehoused the disputed goods as it continues to battle Macy's over the right to sell the products.

Macy's had argued in a lawsuit that the goods, which were labeled JCP Everyday, violate its exclusive contract with Martha Stewart Living Omnimedia Inc. to sell certain goods like sheets and towels. The J.C. Penney Co. items don't carry Martha Stewart's name.

Judge Jeffrey Oing says Macy's didn't prove that selling the goods for now would present irreparable harm.

Macy's sued J.C. Penney and Martha Stewart Living Omnimedia Inc after the two companies announced plans in December 2011 to open "Martha Stewart" stores within J.C. Penney.

The plans were part of former CEO Ron Johnson's attempt to re-invent J.C. Penney after he became chief executive in November 2011. Johnson, who came under fire after sales fell 25 percent at the department store last year, was ousted on Monday.

J.C. Penney has hired Blackstone Group LP's financial advisory arm to explore how best to position the firm financially, three sources said on Thursday, while key investor William Ackman said shareholders were willing to put up more capital.

The prospect of financial backing is likely to help soothe investors rattled by the department store chain's controversial decision this week to defenestrate Johnson as CEO after a failed turnaround and bring back his predecessor -- whose leadership was also much criticized.

J.C. Penney is seeking $1 billion in cash, according to the Wall Street Journal, which added that options could include selling a minority stake.

The company has already been in contact with several private equity firms about a potential investment, two of the sources said.

A J.C. Penney spokeswoman said over the last several months the company has hired outside advisors for "expertise about how to best position the company from a financial standpoint during the transformation."

Reuters and The Associated Press contributed to this report.

Source: http://feeds.nbcnews.com/c/35002/f/653351/s/2aa466c3/l/0L0Snbcnews0N0Cbusiness0Cmartha0Estewart0Eloses0Ebid0Edismiss0Emacys0Econtract0Eclaim0E1C9322178/story01.htm

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