Bloomberg News

Macy’s Says Martha Stewart Living Is Holding It ‘Hostage’

February 17, 2012

(Updates with excerpt from filing in fourth paragraph.)

Feb. 15 (Bloomberg) -- Martha Stewart Living Omnimedia Inc. is “essentially holding Macy’s hostage” by saying that its pact with the department-store chain expires in January 2013, Macy’s Inc. said in court papers in their contract dispute.

Macy’s sued in January to stop New York-based Martha Stewart Living from executing an agreement to sell merchandise in J.C. Penney Co. stores. Macy’s, based in Cincinnati, said it has the exclusive right to sell Martha Stewart-branded products in certain categories.

Martha Stewart Living fired back last week, accusing Macy’s of breach of contract and saying that the retailer has stocked and priced Martha Stewart products in a manner that favors Macy’s own private-label brands. Martha Stewart Living also said Macy’s couldn’t have exercised a five-year renewal option on the deal between the two companies because of the breach.

“The uncertainty created by MSLO’s breach has put Macy’s in an inequitable and untenable position,” Macy’s said in papers filed yesterday in New York state Supreme Court. “If the agreement were to actually expire in January 2013, Macy’s would have to immediately begin seeking to replace and wind down the Martha Stewart product line at Macy’s.”

Jeanne Meyer, a spokeswoman for Martha Stewart Living, said the company stands behind earlier statements and what has been said in court filings.

The case is Macy’s Inc. v. Martha Stewart Living Omnimedia Inc., 650197/2012, New York State Supreme Court (Manhattan).

--Editors: Andrew Dunn, Fred Strasser

To contact the reporter on this story: Chris Dolmetsch in New York at cdolmetsch@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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