Martha Stewart Living Omnimedia Inc.
) have settled their legal dispute over latter's deal with
department store retailer,
J. C. Penney Company, Inc.
). However, none of the companies disclosed terms of the
DILLARDS INC-A (DDS): Free Stock Analysis
PENNEY (JC) INC (JCP): Free Stock Analysis
MACYS INC (M): Free Stock Analysis Report
MARTHA STWT LIV (MSO): Free Stock Analysis
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Macy's, which competes with
), did not welcome the licensing deal signed between J. C. Penney
and Martha Stewart in Dec 2011. The company claimed that Martha
Stewart's agreement to sell certain home and lifestyle
merchandise at J. C. Penney's stores violated the exclusive pact
that it shared with Martha Stewart. Consequently, it filed a
lawsuit in the New York State Supreme Court against Martha
Stewart for the breach of contract. It also dragged J. C.Penney
to court over the deal.
Later, under a settlement, J. C. Penney was forbidden to sell any
products under Martha Stewart brand but was allowed to sell
selected products designed by Martha Stewart under its 'Everyday'
label. However, Macy's legal dispute with J. C. Penney is far
Last year in October, J. C. Penney has agreed to return the 11
million shares (purchased for $38.5 billion) - which represent
16% stake - it acquired at the time of entering the deal with
Martha Stewart. After the stock sale, J. C. Penney will cease to
be part of the Martha Stewart's board of directors.
We believe that the settlement is likely to put an end to high
litigation expenses for both the companies. Macy's as well as
Martha Stewart fared decently in the past 4 quarters and beat the
Zacks Consensus Estimate in 3 quarters with an average beat of
5.8% and 43.1%, respectively.
However, for J. C. Penney, troubles continue to linger. Though
there have been signs of improvement in the company's
performance, it continues to post losses. The impending verdict
on the legal dispute with Macy's is likely to add to its
Shares of Macy's witnessed a marginal decline and closed at
$53.39. J. C. Penney's shares fell nearly 3.0% to close at $8.88.
On the other hand, shares of Martha Stewart rose 8.8% to close at
While Macy's carries a Zacks Rank #2 (Buy), both J. C. Penney and
Martha Stewart have a Zacks Rank #3 (Hold).