J.C. Penney Co. (NYSE: JCP) has realized dwindling stock prices in the past week over its partial legal settlement with Macy's (NYSE:M) over Martha Stewart merchandise along with bankruptcy rumors.
Days before a judge is expected to make a ruling in the Macy's and J.C. Penney battle over the right to sell Martha Stewart housewares, Martha Stewart Living Omnimedia and J.C. Penney scaled back their merchandising agreement.
J.C. Penney agreed that it will not sell kitchen, bed and bath products designed by Martha Stewart that were sold under the label "JCP Everyday". However, it will continue to market other Martha Stewart merchandise such as window treatments and rugs under the label "MarthaHome." J.C. Penney will also return 11 million common shares that it acquired in the initial agreement and it will give up its two seats on the Martha Stewart board.
In addition to the Martha Stewart blow, J.C. Penney publicly denied Twitter posts last week saying it had hired a bankruptcy attorney and had lost access to credit in . Its stock plummeted 8.9 percent on October 15 and 4.8 percent on Oct. 18, the days the tweets appeared.
"When combined with the reported improvements in our business trends, the need for 'financial restructuring' is purely speculative and not grounded in fact," Kristin Hays, a J.C. Penney spokeswoman, told Bloomberg.
J.C. Penney said it will end the year with more than $2 billion in liquidity.
For more, see:
Did J.C. Penney Dump Martha? Macy's Trial Judge Wants to Know
J.C. Penney Calls it Quits with Martha Stewart
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Macy's, J.C. Penney's, Martha Stewart Trial Should Close Out Today
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