Will Martha Stewart's pricey taste hurt JC Penney?
The domestic diva is reportedly insisting on high-end materials for her line of home products, raising profit concerns for the struggling retailer.
Martha Stewart is known for her high-end tastes, blogging to her fans about the pleasures of "thick and fluffy Turkish towels" and "finely ironed linens."
At issue is a deal Penney struck with Martha Stewart Living Omnimedia (MSO) to sell household products branded with Stewart's name, as part of the retailer's strategy to lure new shoppers.
Stewart is insisting that her products for J.C. Penney incorporate high-end materials -- such as top-quality fabrics and packaging components -- leading to concerns among its executives that the retailer will lose money on the goods, the Post notes.
Despite those fears, J.C. Penney CEO Ron Johnson is backing Stewart, according to the report. As a result, the new products' costs have jumped as much as 30% above their replacements.
The report comes at a delicate time for Penney: A lawsuit brought by Macy's (M) against Martha Stewart Living Omnimedia over its deal with J.C. Penney is set to go to trial on Wednesday, according to Reuters.
At J.C. Penney, Stewart's name will appear on rugs, window coverings, as well as Martha Stewart Pantry, a line of food mixes, and Martha Stewart Celebration, which are paper party products, according to The Dallas Morning News. The retailer will also sell a private label called Everyday, ranging from linens to furniture, that will be designed by Stewart's company.
While Penney originally hoped to sell Stewart's products on March 1, that's been delayed until Mother's Day, or May 12, Home Textiles Today notes.
According to the Post, Stewart insisted her cutlery include high-grade stainless steel, and demanded that the glassware come from Europe instead of China. J.C. Penney's won one battle, when executives vetoed fabric from a supplier to Frette, whose Egyptian cotton bedsheet sets can cost over $1,000.
With most U.S. consumers struggling with smaller paychecks as higher payroll taxes took effect in January, the big question for J.C. Penney is whether its customers will pay up for Martha Stewart quality.
More on moneyNOW
They should just dump Martha! I won't buy anything with her name on it!
I'll go elsewhere for my purchases.
Wow what next will JCP come up with next to lure back customers. I don't think adding Martha Stewart's name on anything will help JCP's image and will not bring back former customers. It is sad that JCP has lost their appeal and redesigning their stores did nothing to help their down hill slide.
I realize that times change and businesses need to be proactive in regards to those changes. But I view the last 18-months of jcp 's actions as the company being led by the gang that couldn't shoot straight.
who doesn't carry Martha Stewart? didn't she also have a deal with kmart?
Talk about overdone.
Maybe Pennys should have one section or third floor space of stores devoted to nicer items..
Don't need Martha Stewie; Yup, she did a lot for K-Mart..
Kind of divide off the other Section, then turn the rest off the store into a Target, Costco and WalMart.
Otherwise, we or many are going to "stick a fork in them"...We always liked Pennys..
But they have to change and survive, now; And do whatever it takes..?
Copyright © 2013 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.
A basic income policy can actually ensure a decent standard of living for everyone.
- People left $500,000 in coins at airports last year
- How your driving can affect your credit
- Obamacare projected to cost hundreds of billions less
- November jobs report: Winners and losers
- Student loan debt climbs for 5th year in a row
- Wall Street finally notices Bitcoin
- Part-time workers hurt by on-call system
- 5 myths about late payments and your FICO scores
- Auto loan interest rates hit record low
[BRIEFING.COM] A solid November employment report translated into a solid day of gains for the major averages. While there was some talk that the encouraging job growth raised the odds of the Fed announcing a tapering at its December meeting, the message of the markets today was either that it didn't believe there would be a tapering this month or that it doesn't fear a tapering this month.
It was just one day, yet there was ample meaning wrapped up in the connection that the 10-yr ... More
More Market News
The Fed may start tapering in just a few months. Here are a few of the likely winners and losers.