Court Grants Macy's Injunction in Martha Stewart Case
NEW YORK-Macy's has been granted a preliminary injunction in its lawsuit against Martha Stewart Living Omnimedia (MSLO) over the agreement between MSLO and J.C. Penney to offer certain Martha Stewart home products in J.C. Penney stores and online.
After a hearing on Friday, according to press reports, Justice Jeffrey Oing of New York State Supreme Court in Manhattan granted the injunction, which blocks MSLO and J.C. Penney from taking any steps on making, marketing, distributing or selling certain Martha Stewart-branded products, including bedding, bath products, kitchen textiles, dinnerware and cookware. According to the press accounts, Oing said Macy's had shown that it was likely to prevail in its claim of breach of contract, and that the department-store retailer had established that the MSLO-J.C. Penney agreement was not compatible with Macy's agreement with MSLO.
Macy's filed suit against MSLO in January, one month after MSLO and J.C. Penney announced their partnership. The agreement called for the creation of Martha Stewart shops in J.C. Penney stores, a separate e-commerce site for Martha Stewart home products and the acquiring of a 16.6 percent stake in MSLO for $38.5 million.
In a statement issued to HFN, Macy's said it is "pleased" with the preliminary injunction. "We expect to continue to exclusively sell Martha Stewart-branded merchandise in categories such as cookware, kitchen utensils, bed and bath for the term of our contract, which currently extends to January 2018," the retailer said.
MSLO said, in a statement also provided to HFN, "We will be launching our products both in store and online with J. C. Penney in the first quarter of 2013. Nothing about (Friday's) ruling changes that. We will comply with whatever restrictions are placed upon us at this time, but we note it's a preliminary ruling and we will continue to defend our legal and commercial position. We continue to believe that we have not breached our agreement and that extending our brand to a wide array of retailers is beneficial to all our partners."
As of this morning, J.C. Penney had not commented on the ruling.