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.
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.
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.
[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
More Market News
Fed keeps important 'considerable time' language in reference to short-term interest rates, but dissents and dots leave doubts.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'