The motion, if approved, would likely seal the complaint and include redactions on forthcoming motions, in order to protect certain confidential information.
Presiding Judge Jeffrey Oing told both sides in Manhattan state court Monday that he “would sign” the papers once they were filed.
At issue is whether Martha Stewart, in cutting a deal to sell branded products to Penney’s, has violated her 2006 agreement to make and sell certain branded products exclusively to Macy’s.
While the complaint has not yet been filed — just a summons and a notice — the lawyers divulged some of the case’s core issues at the conference on Monday.
“Macy’s is built around private licenses and exclusive brands,” said Ted Grossman, a partner at Jones Day, who represents Macy’s. “The reason why a person goes to Macy’s versus someplace else is because it’s the only place they can get it.”
The attorney argued that Martha Stewart “confirmed” last week at a Penney’s presentation that the product her company sells exclusively to Macy’s will be sold at Penney’s.
As a result, Macy’s said it intends to file a preliminary injunction to prevent Martha Stewart from selling such branded wares to its rival.
The lawsuit has become a new front in the battle between Macy’s, which has consolidated its position in the traditional department store space, and Penney’s, which operates at a lower price point but is steering an aggressive new course under chief executive officer Ron Johnson, who rose to prominence as head of Apple’s retail effort.
Penney’s plans to replace the 400 brands currently on its floors with 100 focused shop-in-shops and to continue to link up with brand names such as Martha Stewart and Nanette Lepore. This emphasis on having fewer, stronger brands puts Penney’s in more direct competition with Macy’s and its exclusive offerings from the likes of Tommy Hilfiger and Madonna.
The legal fireworks could be just the beginning of a new supercharged rivalry between the two department store giants.
Counsel for the defense, Eric Seiler of Friedman Kaplan Seiler & Adelman LLP, reminded Judge Oing that Penney’s wouldn’t be selling any Martha Stewart-branded product in its stores until February 2013. After renewing its agreement with Martha Stewart last week, Macy’s contends that its agreement with the brand now expires in January 2018.
“Macy’s does not have an exclusive with Martha Stewart,” Seiler said. “Certain goods are made for Macy’s…but we sell to Michael’s [Stores]…to Home Depot.”
Judge Oing smiled and confirmed that he in fact “does remember” seeing Stewart’s line of paint at Home Depot.
“The issue, which is a narrower issue, is the contract says that Martha Stewart, which has a standing agreement with Macy’s, can sell goods in MSLO, Martha Stewart Living Omnimedia, stores, and we are creating Martha Stewart Living Omnimedia stores inside of J.C. Penney,” the attorney clarified. “We have the absolute right to sell whatever we want in MSLO stores.”
Macy’s raised concerns over its intellectual property rights connected to its Martha Stewart-branded product. But lawyers for Martha Stewart said the company doesn’t “intend to sell any” of the goods it makes for Macy’s or give those designs to J.C. Penney.
Opposing counsel added that designers working on Martha Stewart Collection, Martha Stewart’s Macy’s line, will not be working on the Penney’s collection.
“Right now we’re spinning our wheels here,” interrupted Judge Oing. “At the end of the day, you’ve got to file a TRO [temporary restraining order].”
The judge indicated that, if filed, he consider whether to sign such an order, which would remain in effect while a motion for preliminary injunction is being decided.
“Figure out what you want me to sign in respect to the confidentiality of the case,” he said. “We’ll go from there.”
With that, both sides agreed to file that paperwork today.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews