For JC Penney, some empty shelves might be next

The judge in Macy's lawsuit over Martha Stewart warns Penney that it could end up with a lot fewer home goods for sale.

By Aimee Picchi Mar 5, 2013 2:10PM

Customer Service counter at the J.C. Penney store in Westminster, Colorado on February 20, 2009 (© RICK WILKING/Newscom/RTR)J.C. Penney (JCP) might be heading for a disaster this spring. 

The judge in the lawsuit filed by Macy's (M) over Penney's rival contract with domestic diva Martha Stewart issued a stark warning: Empty shelves might be on the horizon for Penney customers.

New York State Supreme Court Judge Jeffrey Oing told Penney's attorneys on Monday that he could order home products with Stewart's name off Penney's shelves this spring, according to The Associated Press. That would spell more problems for the retailer, which last Wednesday reported a complete wreck of a holiday quarter.

Empty shelves are never a good sign, but what would make the situation worse is that Penney is planning a big rollout for its Martha Stewart products on Mother's Day, May 12. The new products, which include rugs and window coverings with Martha's name as well as a private label called Everyday, have already been delayed from a March 1 debut. 

A Penney attorney laid out the consequences for the judge: If the retailer is blocked from selling Martha Stewart products, it would be devastating for the company. Why? It doesn't have a substitute, he said. 

"That's the risk your client took," Oing told Penney's attorneys on Monday, according to the AP. "Ultimately, you guys played it out."

Penney has been struggling with its home-goods area and has planned to introduce a "store-within-a-store" concept using Stewart's brand to revitalize the segment

Losing those products would also prove to be another blow to Penney Chief Executive Ron Johnson, whose strategy for revitalizing the century-old retailer has so far backfired. After he eliminated coupons and sales, many loyal consumers got miffed and avoided the stores, leading to last week's terrible earnings report.

In an attempt to keep Penney's shelves stocked, Martha Stewart took the stand on Tuesday and testified that she believed her company was "absolutely allowed" to design products for Penney despite a previous contract with Macy's, reports Bloomberg. Macy's, which has sold Martha Stewart-brand products since 2007, is trying to block Penney from doing the same and to halt Stewart's company from providing any designs to its rival. 

More on moneyNOW

Mar 5, 2013 8:17PM
Have not shopped there in a yearused to work there. They blew it why don't they dump their plan and go back to sales duh.
Mar 6, 2013 2:48AM

Also, let's not forget to thank Ellen for JCP's demise.

Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

Trending NOW

What’s this?


[BRIEFING.COM] S&P futures vs fair value: +7.80. Nasdaq futures vs fair value: +15.50. The stock market is on track for an upbeat start as futures on the S&P 500 trade eight points above fair value. Index futures spent the Asian session near their flat lines, but lifted off once European markets opened for action. The old continent will be in the spotlight until tomorrow with the Scottish independence referendum taking place today. However, Dundee and Glasgow are not expected to ... More