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Macy’s-Martha-Penney’s Trial Resumes

The lawyers are expected to have called all witnesses by week’s end.

NEW YORK — Testimony resumed Monday in the dispute between Macy’s Inc., Martha Stewart Living Omnimedia Inc. and J.C. Penney Co. Inc. before Judge Jeffrey Oing in New York Supreme Court.

Eric Seiler, counsel for MSLO, disclosed that the company was contemplating whether to call back former MSLO executive chairman and chief executive officer Charles Koppelman on Wednesday. Robin Marino, former president and ceo of MSLO, is also expected to take the stand again, possibly on Wednesday as well.

Due to the availability of certain witnesses, testimony was presented out of order, with lawyers for MSLO not calling anyone on Monday. Lawyers for Penney’s presented two witnesses, who testified in connection with the issue of calculating damages should Penney’s ultimately lose on the permanent injunction sought by Macy’s.

RELATED STORY: Macy’s Loses Bid to Stop J.C. Penney From Selling Unbranded Wares >>

At one point Oing seemed annoyed again at the pace of the trial, noting that generally in retail, business decisions and what can impact sales are a “moving target…the longer we take” given the “dynamic fluidity of the situation.”

That said, Oing told the lawyers, “Let’s move on. The faster the trial is over, the sooner I can provide a decision and put these issues to bed.”

First up was Paul Rutenis, general merchandising officer for Penney’s furniture and home category, who had taken the stand earlier in the trial. He said that while 500 of the retail chain’s stores will feature the home transformation, several hundred more will at the least get the product, if not the makeover. All that product and related advertising, plus the build-out costs for the new home stores, would cause Penney’s harm if it couldn’t sell the contested product on its shelves, Rutenis said. He also said certain Martha Stewart-designed products began selling Monday in the stores and online under the “JCP Everyday” label.

Rutenis’ testimony was aimed at Oing’s discretion in calculating an “equitable remedy,” such as whether Penney’s could sell what’s already on the shelves if it lost versus a ruling requiring it to take the product off the shelves.

Basil Imburgia, senior managing director at FTI Consulting, said he was hired by Penney’s to quantify damages in case of an injunction. Imburgia said there are enough data points available that one can calculate damages in the future by looking at foot traffic and sales data of brands sold at both Macy’s and Penney’s before and after MSLO products hit Penney’s shelves.

While the lawyers are expected to have called all witnesses by week’s end, sources close to the case said there’s a good chance closing arguments will be a few days later, whenever they can be scheduled. That’s because Oing has a trial on a different case starting on Monday.