Terry has made up with Martha, at least businesswise — but he is still mad at J. C. Penney Co. Inc.
Macy’s Inc., led by chairman, president and chief executive officer Terry J. Lundgren, has settled its breach-of-contract lawsuit against Martha Stewart Living Omnimedia Inc., but its claim against Penney’s remains subject to a decision by Manhattan state court judge Jeffrey Oing.
Macy’s said: “Macy’s has resolved its breach-of-contract lawsuit against Martha Stewart Living Omnimedia. We are pleased to be able to put this matter behind us. The terms of our settlement are confidential, will not be disclosed and are not deemed to be material to Macy’s. We can now return our focus to what we do best — bringing beautifully designed, high-quality, affordable products to consumers nationwide. We look forward to a continued, successful partnership together.”
MSLO essentially said the same thing in its statement, also noting that the terms of the agreement are not deemed material to it.
Macy’s added that the settlement has no effect on its outstanding claim against Penney’s. The court still has to rule on its claim, as well as assess damages.
Neither Macy’s nor MSLO provided any additional comment. A spokeswoman for Penney’s declined comment. But Penney’s in October substantially scaled back its earlier tie-up with Martha Stewart, agreeing to sell a smaller number of categories and to return its stake in MSLO and give up its seat on the Martha Stewart board.
Shares of Macy’s on Thursday slipped 0.02 percent to $53.39, while MSLO’s stock shot up 8.8 percent to close at $4.57. Shares of Penney’s were down 3 percent to $8.88.
The settlement between Macy’s and MSLO defuses what had been one of retail’s most riveting legal cases in recent memory. The case has been intermittently at trial since February, and while the main presentation of the case was completed in June, closing statements weren’t heard until August.
The three companies became embroiled over Martha Stewart-branded shops-in-shop at Penney’s stores in a deal that had been inked by Penney’s former ceo Ron Johnson. Penney’s signed the deal even though Stewart already had her own line of exclusive branded home categories at Macy’s. MSLO’s contract with Macy’s was signed in 2006, which the department store said gave it the exclusive for the cookware, bedding and bath categories. MSLO’s deal with Penney’s was inked in 2011, under which the retailer also bought 11 million MSLO shares for $38.5 million. In addition to suing Penney’s for interference of contract, Macy’s wants to bar Penney’s from selling products designed by Stewart, whether her name appears on the product line or not.
MSLO and Penney’s revised their partnership agreement in October, essentially reversing the bulk of the original deal they signed. There’s also now a more focused range of product categories over a shorter period of time, through June 30, 2017, versus the original term that would have expired in 2021. And the product categories that were never in dispute, and are now Penney’s domain, are in window treatments and hardware, lighting, rugs and holiday and celebrations. MSLO will receive design fees and guaranteed minimum royalties.
Mitchell Epner, counsel to the law firm Wilk Auslander, said, “It’s been clear all along that the judge wanted, and still wants, the parties to settle this, and that if he was called in to do the dividing, he could not have done it with the sort of knowledge that the people in the business have.”
Epner, who said that “most of the Macy’s battle is done,” noted: “What this agreement tells us is that when the dust settles, Martha Stewart is still married to Macy’s.”
While the two companies are still working together, it wasn’t clear if the home doyenne and Lundgren have managed to personally bury the hatchet.
When Lundgren took the stand in February, he stuttered in response to whether he still had a friendship with Stewart. He said, “We were, we were, we were friends. I told my team to prioritize her business.”
He also said he was “shocked and blown away” by Stewart’s call to him regarding the deal with Penney’s, and stated that he had hung up on her, noting that he had never hung up the phone on anyone before that.
Macy’s did renew the agreement it had with MSLO months later, even after it filed its lawsuit against MSLO.
According to Lundgren: “This is a very important business to us. I don’t have an answer of what to do if I don’t have Martha Stewart brands in our home [division]. I don’t have a substitute.…I don’t have a personal relationship with Martha Stewart. I haven’t responded to her since that phone call and I don’t intend to.”
As for possible insight on Stewart’s decision to partner with Penney’s, she said during her testimony: “I love Macy’s. I’ve shopped at Macy’s since I was a young child. Macy’s has been a fixture in our home. Macy’s has changed a lot over the years.…As a company, we couldn’t survive without growth.…Macy’s is a $300 million business for MSLO. I don’t want it to go away, but I thought our business would be much bigger than $300 million after five years.”
My character, Dinah Madani, is just the coolest, [most] badass woman imaginable," says @amberroserevah. The actress stars in @marvel's newest series on @netflix, @thepunisher. To prepare for her role, Revah sat down with Homeland agents to get a real sense of with Dinah's day-to-day life is really like. Read our full interview on WWD.com. #wwdeye (📷: @jilliansollazzo)
A scene from the 91st annual @macys Thanksgiving Day Parade. The parade, which boasts 50 million TV viewers and 3.5 million on-site spectators, is considered one of the largest and most watched parades in the world. (📷: Jason Szenes/EPA-REX)
The circus came to @bloomingdales 59th Street on Tuesday night and lit up Lexington Avenue with acrobatic dancers, death-defying knife throwing, sword swallowing and aerial acts with no net. The 45 minutes of theatrics built up to unveiling the holiday windows depicting @swarovski crystal-encrusted circus pieces and scenes from “The Greatest Showman” – songs from the soundtrack included. See the rest of the photos on WWD.com #wwdfashion (📷: Joshua Scott)
The psychedelic fashion that pervaded the ’60s is back with an exhibit at the @museumofcityny. “Mode New York: Fashion Takes a Trip” chronicles the changing styles from 1960 through 1973 and features designers such as @ysl, @oscardelarenta and more. The exhibition, which is on display through April 1, is organized into four periods: First Lady Fasion, Youthquake, New Bohemia and New Nonchalance. Pictured here is model Pat Bardonella during the Garvey Day Parade in 1968. (📷: @kwamebphoto) #wwdeye #wwdfashion
“People should be a lot more honest in expressing both the dark and light of themselves. We need to give each other the space to do that because it’s the only way we can grow and evolve,” says @noelwells of her new film “Mr. Roosevelt,” which is largely based on her own struggles. Unexpectedly leaving @nbcsnl in 2014 after just one season, Wells felt set back in her self-esteem and career trajectory. She quickly refocused her energy to more personal projects, which led to the completion of “Mr. Roosevelt.” Read the rest of WWD’s interview with the “Master of None” actress on WWD.com #wwdeye (📷: @jilliansollazzo)
@barbrastreisand is giving fans a chance to see her perform up close in a new concert series, which makes its debut on @Netflix today. From behind-the-scenes takes to her concert performance in Miami last December, the two-hour streaming special captures Streisand in her element. Pictured here is the singer/actress photographed for WWD in 1963. (📷: Palmieri Tony) #wwdeye #wwdarchive
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)