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Two major retailers in legal battle over Martha Stewart products

Many things have been said about Martha Stewart over the past few years, and not all of them have been kind. Stewart remains an unparalleled authority when it comes to ideas on interior decorating, entertaining and other touches aimed at improving the family home.

However, some in the business community have been critical of how she has handled her "personal brand," alleging that she has oversaturated the consumer market with products bearing her name and endorsement. As if to confirm this criticism, two of the nation's leading retailers are embroiled in a lawsuit alleging breach of contract regarding exclusivity rights to the sale of Martha Stewart products.

Macy's Inc. recently filed a lawsuit against fellow retailer J.C. Penney Co., alleging that JCP's contract to sell Martha Stewart Living products is unlawful. The reason, according to the complaint, is that Macy's entered into a contract with Stewart in 2007 which grants the company exclusivity when it comes to peddling the home guru's goods.

Macy's says that the agreement is in place until 2018, and gives Macy's exclusivity rights to houseware, cookware, bedding and bath products sold under Martha Stewart's name. Therefore, the company was not pleased to hear that JCP had entered into a contract allowing them to sell some of Stewart's products starting this winter.

The complaint alleges that, "J.C. Penney wanted to rob Macy's of market share and destroy the competitive advantage that it enjoys as a result of its existing exclusive agreement with (Martha Stewart Living)." It goes on to say that the breach of contract has already caused "substantial damages and threatens to inflict incalculable further harm on Macy's. Billions of dollars of sales are involved."

It will likely take some time to untangle this mess in court. In the meantime, a judge has issued a preliminary injunction that prohibits any of the disputed Martha Stewart Living products to be sold in JCP stores.

Source: Google News, "Macy's sues JC Penney over Martha Stewart deal," Aug. 16, 2012

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