J.C. Penney doesn’t expect impact from Macy’s suit

Plano, Texas – In a March 21 regulatory filing, J.C. Penney Co. Inc. said it does not expect the result of a lawsuit filed by Macy’s Inc. alleging that Penney was selling Martha Stewart Living products in violation of an exclusivity agreement to have a significant negative impact on its results.

"While no assurance can be given as to the ultimate outcome of this matter, we currently believe that the final resolution of this action will not have a material adverse effect on our results of operations, financial position, liquidity or capital resources," Penney said in the filing.

Macy’s initially filed the lawsuit in December 2011, and settled a related lawsuit with Martha Stewart Living in January 2014.

In January, reports indicated that Macy’s and Penney were unable to settle the suit on their own, meaning a judge would probably have to make a ruling. In October 2013, Penney said it would sell a smaller selection of Martha Stewart Living products, like window treatments, rugs and party supplies, categories that are not in contest by Macy's.

Also, Martha Stewart Living will receive fees, royalties and the 11 million shares of its stock that Penney now holds, and Penney also will no longer have representation on the Martha Stewart Living board. In addition, Penney will terminate its partnership with Martha Stewart in 2017 instead of 2021.

 

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