J.C. Penney scores victory in dispute with Macy’s — for now
New York — A New York State Supreme Court Judge ruled on Friday that J.C. Penney’s could temporarily sell certain housewares products from Martha Stewart Living in Penney stores. The ruling allows Penney to sell the product under the “JCP Everyday” label until a final decision comes at the end of the trial.
Macy’s had requested that the Everyday products be added to the list of items Penney is prohibited from selling. Macy’s claimed that the products were in violation of its exclusive contract with Martha Stewart Living Omnimedia — even if they don’t carry the Martha Stewart brand logo.
The products impacted by the Friday ruling have already been produced, and are due to make their debut in Penney’s new in-store home shops beginning in May. If Macy’s had prevailed, it potentially could have cost Penney millions of dollars — up to $100 million according to some analysts — as it was forced to dump products. The retailer would also have been left with empty shelves.
The ruling seemed to reflect some sympathy by Judge Jeffery Oing sympathy for Penney, and his feeling that the retailer’s former CEO, Ron Johnson, had a lot to do with the mess that Penney is currently embroiled in with Macy’s. The judge also worried about the impact of not allowing Penney’s to sell the products in question.
“It’s not Ron Johnson that I’m enjoining,” he said, according to a New York Times report. “It’s a company and the company employs a lot of people.”
He went on to say: “What happens is that they lose the money, the money they’ve spent. Employees may be terminated.”
The judge however, warned Penney could still face costly damages if Macy’s ultimately prevails in the case. The trail is set to resume this week.
Macy’s said it would appeal the decision.
Consumer confidence falls to nine-month low
New York — A report released Friday found that confidence among American consumers declined in April to a nine-month low. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment declined to 72.3 in April from 78.6 a month earlier, lower than Bloomberg’s earlier estimates that called for a flat reading.
The decline reflects consumer pessimism about the economy and continuing effects from the increased payroll tax.
“If this weakness persists, then I think it will likely temper spending in coming months,” said Millan Mulraine, director of U.S. rates research at TD Securities USA LLC in New York. “The rollback on payroll taxes is beginning to have an impact on consumer spending activity and consumer confidence.”
WSJ: Hedge fund pressures Jones Group to sell parts of portfolio
New York — A report by the Wall Street Journal on Friday said that hedge fund Barington Capital Group is pressing Jones Group Inc. to slim down by divesting parts of its portfolio.
Citing an unidentified source, WSJ said that Barington – in a meeting earlier this month – urged Jones to hire financial advisers to analyze many of the company’s 35-plus to pare down the portfolio and focus on its core and emerging brands.
The New York-based retailer is in the throes of a turnaround, led by CEO Wesley Card. Last year, Jones Group posted a $55 million loss on sales of $3.8 billion, well below pre-recession sales of $4.7 billion in 2006.