Macy's was granted a preliminary injunction in its lawsuit against Martha Stewart Living Omnimedia over an agreement with JC Penney.
Justice Jeffrey K. Oing of New York State Supreme Court in Manhattan said Friday, following a hearing, that he will grant Macy's motion for the court order. "The scales tilt in favor of Macy's ," he said.
Any disruption in JC Penney's plans to introduce Martha Stewart-branded products early next year would be yet another blow to the retailer, which is in the midst of a controversial transformation. Amid slowing sales, JC Penney has added more promotional messaging and tweaked its pricing strategy. The Martha Stewart-branded shop is meant to anchor the retailer's 20,000-square-foot area dedicated to home items. Ms. Stewart has appeared at two of JC Penney's high-profile investor meetings in recent months.
Macy's sued in January to stop New York-based Martha Stewart Living from executing a sales agreement that was announced in December with JC Penney. Macy's said it has the exclusive right to sell Martha Stewart-branded products in certain categories.
Macy's asked for an injunction blocking Martha Stewart Living from taking any steps under the agreement with JC Penney on marking, marketing, distributing or selling Martha Stewart-branded products involved in the dispute. They include bedding, bath, kitchen textiles, dinnerware and cookware.
JC Penney acquired a 17% stake in Martha Stewart Living for $38.5 million as the U.S. department-store chain seeks to revive sales with new mini-stores dedicated to the home goods brand.
"Macy's is pleased with the court's granting of a preliminary injunction," said Jim Sluzewski, a spokesman for Macy's , in an e-mailed statement. "We expect to continue to exclusively sell Martha Stewart-branded merchandise in categories such as cookware, kitchen utensils, bed and bath for the term of our contract, which currently extends to January 2018."
Sarah Brown, a spokeswoman for Martha Stewart Living, said the decision is "a preliminary ruling, and we will continue to defend our legal and commercial position."
"We continue to believe that we have not breached our agreement and that extending our brand to a wide array of retailers is beneficial to all our partners," Ms. Brown added.
A spokeswoman for JC Penney, didn't respond immediately to a request for comment.
-- Bloomberg News --
Contributing: Natalie Zmuda