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J.C. Penney and Martha Stewart's company lock horns in contract dispute

Houston residents might have heard that the department store J.C. Penney is trying to turn over a new leaf. It recently hired a former Target executive to add some pep to its corporate image, inked a deal to sell clothes designed by the Kardashian sisters of reality TV fame and hired comedian Ellen DeGeneres as a spokeswoman. But one move to polish its image might have gone a little too far and put it right in the middle of a contract dispute.

J.C. Penney and Martha Stewart's company, Martha Stewart Living Omnimedia, recently signed a deal that would allow J.C. Penney to sell certain Martha Stewart products, like kitchen gadgets, bathroom décor and household items.

The problem is, rival department store chain Macy's already sells Martha Stewart branded products along the same vein as those to be sold at J.C. Penney, and so it has sued Martha Stewart Living Omnimedia, claiming the deal with J.C. Penney breaches their pre-existing contract.

Macy's claims that under a 2006 contract, it alone has the right to sell licensed Martha Stewart products. The exclusivity portion of that deal is not set to expire until 2018. Neither Martha Stewart Living Omnimedia nor J.C. Penney has commented on Macy's assertions.

Whatever happens, it will be interesting to see how this case develops. Martha Stewart, of course, is quite popular, so it is unlikely that either company will let go of the rights to sell her products without a fight.

Source: Reuters, "Macy's sues Martha Stewart Living," Jan. 23, 2012

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