Did JCPenney Dump Martha? Macy's Trial Judge Wants To Know

Weeks after the three-way trial between Macy's (NYSE:M), JCPenney (NTSE:JCP) and Martha Stewart (NYSE:MSO) ended, the judge is calling the parties together again to find out if Penney's has already stopped using Stewart's company as a supplier, according to Bloomberg.

New York state judge Jeffrey Oing, who presided over the trial in which Macy's accused Penney's of interfering with its exclusive contract with Stewart, scheduled a hearing for Sept. 25 without saying why. But an unnamed Bloomberg source told the news service that Oing plans to ask the companies' lawyers about a Sept. 4 New York Post story that said Penney's has already ended its deal with Stewart. If true, that could affect the judge's ruling on the contract.

Stewart's company, Martha Stewart Living Omnimedia, has said the contract is still in operation. JCPenney has not commented publicly.

But if Penney's hasn't already canceled the contract, that's likely to be a formality. The Stewart merchandise was intended to be the centerpiece of the 2012 strategy by Penney's then-CEO, Ron Johnson, to remake the 1,100-store retailer as an upscale chain that would appeal more to younger shoppers. After a year of sinking sales and expensive store makeovers, Johnson was fired and his predecessor, Mike Ullman, reinstalled as temporary CEO. Ullman has been dismantling much of Johnson's failed plan, and has reportedly said that he doesn't like the Stewart merchandise and, worse, it hasn't been selling.

Penney's is also dealing with lawsuits by contractors who built the new home departments in 500 JCPenney stores that were intended to be stocked with upscale goods, as well as legal actions by other suppliers who were promised special positioning as shops-within-the store under contracts signed while Johnson was still CEO.

For more:

- See this Bloomberg story

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