Macy’s Wins Temporary Bar on Some Penney Stewart Sales

Macy’s Inc., the second-biggest U.S. department-store chain, said it won a ruling that temporarily bars J.C. Penney Co. (JCP) from selling some items designed by Martha Stewart Living Omnimedia (MSO) Inc.

A New York judge banned J.C. Penney from selling Martha Stewart Living-designed goods under the label “JCP Everyday” in certain categories exclusive to Macy’s until he rules on the retailer’s request for a temporary restraining order blocking the sales, said Jim Sluzewski, a spokesman for Cincinnati-based Macy’s, in an e-mail.

Richard T. Andrias, an associate justice with the New York State Supreme Court’s Appellate Division in Manhattan, made the ruling during a closed hearing in Manhattan yesterday, Sluzewski said. The decision couldn’t be immediately confirmed with the court. Andrias plans to rule on the request for the temporary restraining order at midday tomorrow, Sluzewski said.

Macy’s is suing both New York-based Martha Stewart Living and Plano, Texas-based J.C. Penney, alleging that sales of products designed by Stewart’s company in J.C. Penney stores violate an exclusivity deal between Martha Stewart and Macy’s signed in 2006.

‘JCP Everyday’

Macy’s on April 15 filed an appeal of the refusal of Justice Jeffrey K. Oing of New York State Supreme Court to order J.C. Penney not to sell goods designed by Martha Stewart Living under the “JCP Everyday” label.

Oing said Macy’s hadn’t shown that it would suffer irreparable harm if J.C. Penney was allowed to sell the unbranded goods. The judge said an earlier injunction he issued in July against Martha Stewart Living applied only to goods sold at J.C. Penney branded with Martha Stewart’s name in categories exclusive to Macy’s, such as cookware and bedding.

Joey Thomas, a spokesman for J.C. Penney, declined to comment on yesterday’s ruling in an e-mail. Katherine Nash, a spokeswoman for Martha Stewart Living, also declined to comment in an e-mail.

The parties returned to court last week to resume a nonjury trial of Macy’s lawsuits following a monthlong break, during which mediation efforts ordered by Oing were unsuccessful. The trial, which began Feb. 20, has featured testimony from Martha Stewart, Macy’s Chairman Terry Lundgren and former J.C. Penney Chief Executive Officer Ron Johnson, who was ousted the same day the trial resumed. Macy’s rested its case on April 10.

J.C. Penney in December 2011 acquired a 17 percent stake in Martha Stewart Living for $38.5 million. Macy’s, which has sold Martha Stewart-branded home goods since 2007, sued her company the following month, saying it had the exclusive right to sell items in certain categories including bedding and cookware. Macy’s sued J.C. Penney about three months later.

The cases are Macy’s Inc. (M) v. Martha Stewart Living Omnimedia Inc., 650197/2012, and Macy’s Inc. v. J.C. Penney Corp., 652861/2012, New York State Supreme Court (Manhattan).

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

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

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