NEW YORK – After a three-month break, attorneys for J.C. Penney Co. and Macy’s Inc. squared off in a New York court Thursday as they presented closing arguments in a contract dispute case centered on their partnership with home maven Martha Stewart.
Mark Epstein, one of the lead attorneys representing Penney, told New York state Supreme Court Judge Jeffrey Oing that if Macy’s wanted to prevent others from selling goods in its exclusive categories like pots and bath items, it should have written a better contract.
And Theodore Grossman, who represents Macy’s, said Penney was using any excuse to hide the reality that it intentionally interfered with Macy’s contract with Stewart when it signed a merchandising deal in December 2011.
“It’s been a long trial. But what it comes down to is a poorly written contract,” argued Epstein. “Time has come to put an end to this case.”
Grossman argued that Penney, based in Plano, Texas, aggressively induced Martha Stewart Living Omnimedia to breach the contract, and that the contract is clear that Macy’s has the right to all the designs created by Stewart in the exclusive categories, not just specific products.
“J.C. Penney knew exactly what it was doing when it entered into the contract,” said Grossman. “Their intention was to harm Macy’s.”
Oing promised he would make a ruling on whether Macy’s has exclusive rights to sell certain merchandise such as bed, bath and kitchenware items “soon,” but he said it wouldn’t be Friday. The decision would cap a closely watched trial that began in February but continued in fits and starts because of vacation schedules and other interruptions. At one point, Oing even ordered the parties into mediation in March, but that was unsuccessful.
The trial featured testimony from Macy’s CEO Terry Lundgren, former Penney CEO Ron Johnson, and Stewart herself. Johnson appeared on the stand just a month before he was fired as Penney CEO, 17 months into his tenure.
Macy’s is seeking not only to block Penney from opening mini boutiques filled with Stewart-branded goods in certain categories, but also to prevent it from selling designs created by Stewart that do not carry her name. The company also seeks monetary damages.
The stakes are high for all three players, but particularly for Penney, which has been counting on a revamped home area launched this spring to help it rebound from a disastrous year.