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Martha Stewart contract dispute comes before the court

Florida fans of the Martha Stewart brand are likely aware of litigation concerning the famous homemaker’s brand of household goods. A contract dispute lawsuit between Martha Stewart Living Omnimedia, Macy’s and JC Penney recently began, and has received media coverage throughout the nation. The outcome will be determined by a judge; no jury will be involved in the process.

The suit revolves around a dispute concerning whether Martha Stewart can partner with JC Penney on production of a line of household products that would be featured and sold within a ‘shop-to-shop’ concept. JC Penney is developing a retail ‘neighborhood’ of 20,000 square feet that would feature Martha Stewart products as a part of the company’s efforts to reinvent their brand. Macy’s says it required full exclusivity when it decided to work with Martha Stewart. The company also asserts that the use of the Martha Stewart brand at JC Penney is a violation of that agreement.

Furthermore, Macy’s claims that in the aftermath of Martha Stewart’s prison term over a conspiracy charge, the retailer was instrumental in helping Stewart regain market sustainability. Macy’s also points to use of a Martha Stewart line in Kmart stores, which Macy’s claims led to a significant downscaling of the brand. In short, Macy’s claims a great deal of responsibility to bringing the Martha Stewart name to a more upscale clientele, and want to protect what Macy’s asserts was an exclusive contract with the brand.

This case is likely to become contentious and may be lengthy, as all parties have a great deal to lose. As for consumers, the outcome will affect their access to Martha Stewart products, especially due to legal maneuvers which attempt to remove those products from store shelves during the course of the litigation. The lawsuit provides an example of the serious nature of contract dispute issues between Florida business partners, as well as the importance of having a system in place to respond to similar legal action.

Source: Advertising Age, “Inside the Courtroom During Macy’s, JC Penney Battle Over Martha Stewart,” Natalie Zmuda, Feb. 20, 2013

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