J.C. Penney, Martha Stewart Living Join Forces for In-Store and Online
NEW YORK and PLANO, Texas-J.C. Penney and Martha Stewart Living Omnimedia (MSLO) are teaming up to create distinct Martha Stewart retail stores within the majority of J.C. Penney stores, and an e-commerce website devoted to Martha Stewart products.
The in-store retail locations are slated to open in February 2013, and the site will also debut in that year. The 10-year, multilevel deal includes an initial investment of $38.5 million by J.C. Penney in MSLO at $3.50 a share, and will give J.C. Penney representation on the MSLO board of directors. Over the 10 years, MSLO is expected to receive more than $200 million from J.C. Penney.
The stores will offer home and lifestyle products designed and curated by Stewart and her team, and provide shoppers with educational tips. The site will provide what a joint statement between the two companies said will be "a wide range of home and lifestyle products, including those sold in the Martha Stewart stores inside J.C. Penney, and other merchandise designed or selected by Martha Stewart."
A source close to the agreement said it will not affect the Martha Stewart program at Macy's, which will continue. Noting former Apple retail executive Ron Johnson's recent ascendancy to CEO of J.C. Penney, the source said this arrangement is much like Apple's retail structure, which includes stand-alone Apple stores plus Apple in-store locations in retailers such as Best Buy.
In the joint statement, Johnson said J.C. Penney intends for the Martha Stewart stores "to be a key centerpiece of our new strategy to transform J.C. Penney into America's Favorite Store." Describing Johnson as "a true innovator and someone who has been fundamentally redefining the retail experience," Stewart said partnering with J.C. Penney "is a big and important step in realizing my dream of putting our Martha Stewart-designed products within easy reach of an even broader consumer audience."