OPERATIONS

Closing arguments in Macy’s-JC Penney suit set for Aug. 1

BY Dan Berthiaume

New York – Closing arguments for the lawsuit Macy’s filed against JC Penney and Martha Stewart Living Omnimedia last year are scheduled to commence Aug. 1, according to a report in Reuters. The suit claims a December 2011 agreement to create Martha Stewart boutiques in JC Penney stores violated Macy’s exclusive right to sell Martha Stewart Living products.

Since April 2012, an injunction has blocked JC Penney from selling any Martha Stewart-branded items, although it has been allowed to sell existing inventory of Martha Stewart merchandise branded under the JCP Everyday banner. Depending on how this lawsuit is resolved, JC Penney may be allowed to sell Martha Stewart Living merchandise or may have to pay damages to Macy’s.

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Starbucks raises some prices

BY Dan Berthiaume

Seattle – Starbucks has enacted small increases in the prices of less than one-third of its beverages in select markets. The increases, which average about 1%, affect smaller sizes of brewed coffee, tea, latte and espresso drinks. Larger venti- and grande-sized drinks will not have their prices changed.

Although the price of coffee beans has actually significantly gone down, Starbucks has cited increases in other costs, such as labor and real estate. This is the first widespread price increase at Starbucks in about 18 months. As a result, the cost of a tall coffee beverage in markets where prices have increased will go up by about 10 cents.

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Zimmer may seek return to Men’s Wearhouse

BY Dan Berthiaume

Fremont, Calif. – In another twist to the ongoing Men’s Wearhouse-George Zimmer saga, Reuters reports that Men’s Wearhouse founder and former executive chairman Zimmer is contemplating trying to recapture his position as executive chairman through such means as a buyout attempt with private equity backing or rallying the support of shareholders. Neither Zimmer nor Men’s Wearhouse has officially commented, but Zimmer is reportedly consulting advisers, including his legal counsel, Cooley LLP. Zimmer resigned his position on the retailer’s board of directors yesterday.

The board of directors of Men’s Wearhouse also is offering new comments about its recent decision to terminate Zimmer on June 19. In an official statement, the board said terminating Zimmer was not intended to hurt him, but to protect the best interest of Men’s Wearhouse and its shareholders and employees.

"Mr. Zimmer had difficulty accepting the fact that Men’s Wearhouse is a public company with an independent board of directors and that he has not been the CEO for two years,” said a statement attributed to the board of directors. “He advocated for significant changes that would enable him to regain control, but ultimately he was unable to convince any of the board members or senior executives that his positions were in the best interests of employees, shareholders or the company’s future.”

The board cited specific issues of contention with Zimmer, including refusal to support CEO Doug Ewert and other members of the management team, demand for veto power over executive compensation, objection to a previously agreed upon review of strategic alternatives for K&G and support of selling the company to an investment group against the wishes of the rest of the board. Men’s Wearhouse also said that Zimmer left them no options other than giving him full control of the company or terminating him.

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