Boston, MA 01/03/2014 (wallstreetpr) – J.C. Penney Company, Inc. (NYSE:JCP) has been left out of the latest settlement over product exclusivity contract in which Macy’s, Inc. (NYSE:M) sued the retailer alongside Martha Stewart Living Omnimedia, Inc. (NYSE:MSO).
This week, Macy’s, Inc. (NYSE:M) and Martha Stewart Living Omnimedia, Inc. (NYSE:MSO) announced a settlement to their dispute but refused to disclose further details. However, it was clear from the announcement that Macy’s, Inc. (NYSE:M) would still push on with its case against troubled department store J.C. Penney Company, Inc. (NYSE:JCP).
The issue
In 2011, J.C. Penney Company, Inc. (NYSE:JCP) and Martha Stewart Living Omnimedia, Inc. (NYSE:MSO) were sued by Macy’s, Inc. (NYSE:M) over violation of a merchandize exclusivity contract. Macy’s, Inc. (NYSE:M) has entered into an exclusive merchandizing agreement with Martha Stewart Living Omnimedia, Inc. (NYSE:MSO) which started in 2006.
The agreement barred Martha Stewart Living Omnimedia, Inc. (NYSE:MSO) from the items covered under the exclusive offering to other retailers. But in December 2011, Martha Stewart Living Omnimedia, Inc. (NYSE:MSO) breached this contract and started offering the bound items in J.C. Penney Company, Inc. (NYSE:JCP) stores, prompting Macy’s, Inc. (NYSE:M) to sue both companies.
However, J.C. Penney Company, Inc. (NYSE:JCP) has since stopped the selling of the controversial items. But apparently, Macy’s, Inc. (NYSE:M) still thinks that it has some issues to settle with the century-old retailer which is why the latest settlement excludes J.C. Penney Company, Inc. (NYSE:JCP).
Martha Stewart Living Omnimedia, Inc. (NYSE:MSO) offers a broad range of home and bath items. Its deal with J.C. Penney Company, Inc. (NYSE:JCP) involved the company gaining floor space in the latter’s store and the latter taking a stake in the former’s stock. So far many of those agreements have been reversed.
Struggle
J.C. Penney Company, Inc. (NYSE:JCP) is struggling to turnaround its performance after a very long time of poor business. It needs to get past a lot of lawsuits and distractive matters to allow full focus on turnaround.
The company is presently using its more than $3 billion capital injection to boost performance. J.C. Penney Company, Inc. (NYSE:JCP) is also running heavy discount products to entice more shoppers to its stores. A lot has been achieved since turnaround became the main agenda after the ouster of former CEO Ron Johnson April 2013.
