J. C. Penney Company Inc.
Martha Stewart Living Omnimedia Inc.
) took center stage with the three companies back in the legal
tussle over the right to sell the latters' branded products,
after they failed to reach a consensus during a month long
mediation period ordered by the court, Associated Press
Macy's, which has been selling an exclusive line of products
by Martha Stewart since 2007, did not welcome the licensing deal
between J. C. Penney and Martha Stewart Living Omnimedia that was
penned in Dec 2011. Macy's claimed that Martha Stewart's
agreement to sell certain home and lifestyle merchandise at J. C.
Penney's stores violates the exclusive pact which it shares with
Macy's had been irked ever since the licensing deal was
signed. By virtue of the deal, J. C. Penney acquired a 16.6%
stake in Martha Stewart Living, and plans to open Martha Stewart
retail departments within its stores.
J. C. Penney invested $38.5 billion (or $3.50 per share) to
buy 11 million newly-issued shares of Martha Stewart Living.
Thus, it become a major stockholder and now owns two seats in the
latter's board. The deal came as a turning point for J. C.
Penney, which has been losing its foothold in the market as it
struggles against retail chains such as Macy's and
To regain its lost glory, J. C. Penney hired Ron Johnson, who
announced a string of strategic measures to bring the company
back on the growth trajectory. However, his ambitious
transformation ideas failed to show desired results. In a major
turn of events, the company yesterday took a tough decision and
expelled him from his service, and reappointed the former CEO,
Myron E. (Mike) Ullman, III at the helm, effective immediately.
Ron Johnson remained on the board for only 17 months.
Shares of Macy's hit a new 52-week high of $44.24, before
closing at $43.99, up 1.4% from the previous day's session. J. C.
Penney's shares jumped 2.7% to close at $15.87. On the other
hand, shares of Martha Stewart Living Omnimedia dropped 2.1% to
close at $2.36.
Macy's holds a Zacks Rank #1 (Strong Buy), whereas both J. C.
Penney and Martha Stewart Living Omnimedia carry a Zacks Rank #3
PENNEY (JC) INC (JCP): Free Stock Analysis
KOHLS CORP (KSS): Free Stock Analysis Report
MACYS INC (M): Free Stock Analysis Report
MARTHA STWT LIV (MSO): Free Stock Analysis
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