Martha Stewart loses bid to dismiss Macy’s contract claim

NEW YORK, Fri Apr 12, 2013 — Martha Stewart’s company lost a bid on Thursday to dismiss Macy’s Inc.’s claim that it violated their contract when it designed certain products for J.C. Penney Co. Inc., even if the products do not carry the Martha Stewart brand.

New York State Supreme Court Justice Jeffrey Oing’s ruling may affect whether J.C. Penney can sell Martha Stewart-designed home goods in bedding, bath and cookware under a “JCP Everyday” label.

The judge is expected to rule Friday on whether to temporarily block Penney from selling Martha Stewart-designed goods that Penney manufactured in that “Everyday” packaging.

A preliminary injunction already in place bars J.C. Penney from selling Martha Stewart brand products in certain categories.

A Citi analyst on Tuesday estimated the inventory already in a warehouse could be worth $100 million.

Oing also pushed again for the sides to settle, rather than leaving the matter in his hands.

“This is a business deal that you should not have courts getting involved in,” Oing said. “It’s getting to a point where the clock can’t be turned back. The ship is ready to sail.”

Macy’s sued J.C. Penney and Martha Stewart Living Omnimedia Inc. (MSO.N) after the two companies announced plans in December 2011 to open “Martha Stewart” stores within J.C. Penney.

 

The plans were part of Ron Johnson’s attempt to re-invent J.C. Penney after he became chief executive in November 2011. Johnson, who came under fire after sales fell 25 percent at the department store last year, was ousted on Monday.

Macy’s, J.C. Penney set to resume trial over Martha Stewart

NEW YORK, Mon Apr 8, 2013 — Macy’s Inc. and rival J.C. Penney Co. Inc. are due back in court Monday in their battle over Martha Stewart home goods after a month-long mediation effort appeared to have failed.

The trial is set to resume in New York state court over whether Macy’s has an exclusive right to sell certain Martha Stewart products.

The legal battle has hampered a key part of turnaround plans for J.C. Penney, which opened the first of its in-store boutiques on Friday with only some of the Martha Stewart goods it had originally planned.

Justice Jeffrey Oing last month ordered Macy’s, J.C. Penney and Martha Stewart Living Omnimedia Inc. into mediation in the hopes of resolving the dispute while the non-jury trial was in recess because of scheduling conflicts.

But, as of Friday, no deal had been struck and witnesses were scheduled to testify on Monday and Tuesday, according to a person familiar with the case.

Among the witnesses are J.C. Penney marketing executives, according to the person, who wasn’t authorized to speak publicly and did not want to be identified.

J.C. Penney CFO to leave this week after 15 months on job

PLANO, Texas, Wed Apr 11, 2012 – J.C. Penney Co. Inc. said on Wednesday that Michael Dastugue is leaving on Friday after just 15 months as chief financial officer as the department store chain continues to work on its overhaul under its new chief executive.

COO Mike Kramer will assume the CFO duties on an interim basis while a search for a replacement is conducted, the company said. Kramer joined Penney in December, a month after his former boss at Apple Inc., Ron Johnson, became Penney’s new chief executive officer.

Shares of Penney rose 3 percent to $34.20 in morning trade.

Under Johnson, Penney quickly did away with its old pricing strategy and is bringing in stores featuring certain brands such as Martha Stewart inside the chain’s large department stores to revitalize the 110-year old chain.

Before he joined Penney, Kramer was most recently president and CEO of clothing maker Kellwood Co. From 2000 to 2005 he was CFO of Apple Retail, where he reported to Johnson.

Dastugue, 47, has been at Penney since 1991 and was named CFO in January 2011. He previously worked as a senior accountant at Arthur Andersen.

His departure was announced less than a week after Penney said it planned to cut hundreds of jobs at its headquarters and shut down a customer call center in Pittsburgh.

Penney quarterly same-store sales fall 1.8 percent

PLANO, Texas – J.C. Penney Co. Inc. said on Friday that sales at its stores open at least a year fell 1.8 percent over the holiday quarter, contributing to a sharp drop in its gross profit margin.

In the fourth quarter ended on Jan. 28, Penney had a net loss of $87 million, or 41 cents per share, compared with a profit of $271 million, or $1.13 per share, a year earlier.

Gross margin fell 7.4 percentage points to 30.2 percent, hurt by weak sales that prompted the department store chain to cut prices.

Penney reiterated its forecast of an adjusted profit of $2.16 per share this fiscal year.

J.C. Penney clears out clearance with new pricing plan

NEW YORK – J.C. Penney Co. Inc. is doing away with deep discounts in favor of offering shoppers simpler pricing and promotions, the department store’s new chief executive said on Wednesday.

Penney will also revamp its more than 1,100 locations over the next several years. By 2015, every store in the chain will be carved up into about 100 shops within the store, featuring brands by the likes of home goods design icon Martha Stewart and fashion designer Nanette Lepore, executives said.

Penney, whose sales performance has lagged that of Macy’s Inc. and Kohl’s Corp. in recent years, has confused shoppers by focusing on discounts and promotions, CEO Ron Johnson said at an event in New York, where the chain introduced its new strategy.

“The customer knows the right price,” Johnson said. “To think you can fool a customer is kind of crazy.”

The changes are the first big push by Johnson, who became CEO in November after 11 years at Apple Inc., where he built that company’s retail chain.

Wall Street is waiting to see if the magic he led at Apple’s stores, known for their streamlined look and industry-leading sales per square foot, can be recreated in a department store chain that has lost its edge.

The company will be offering financial details in a meeting with Wall Street analysts on Thursday.

“I am betting on the jockey, not the horse. I think Ron Johnson can make it happen,” said Mervin Morris of Morris Management Company. “He has taken on a very big task.”

Shares of Penney were down 1.3 percent at $34.15 in trading on the New York Stock Exchange.

J.C. Penney profit flat and forecasts Q3 sales gains

NEW YORK ― J.C. Penney Co. Inc. reported a flat quarterly profit on Friday as sales were dampened by its exit from its catalog business, and the retailer became the latest department store chain to forecast continued sales gains in the current quarter.

The company reported net income stayed steady at $14 million, or 7 cents per share, for the second quarter ended July 30, compared with a year earlier.

As previously reported, net sales were down 0.8 percent to $3.91 billion, while same-store sales were up 1.5 percent.

Penney expects sales at stores open at least a year, or same-store sales, to rise between 2 percent and 3 percent in the third quarter.

Penney forecast earnings per share in the quarter will range between 15 and 20 cents, including a 5 cent restructuring charge.

Apple retail executive to lead J.C. Penney

 J. C. Penney announced on Tuesday that its chief executive of seven years, Myron E. Ullman III, is stepping aside, to be replaced by Ron Johnson, the top retail executive for Apple.

Mr. Ullman will hand over the chief executive reins to Johnson on Nov. 1, and Ullman will become executive chairman of the company.

Johnson is the senior vice president for retail at Apple, and has overseen the successful Apple Store concept and expansion, from the first store in 2001 to the more than 300 stores today. Analysts and competitors alike have pointed to Apple stores as the future of retail, particularly the in-store training sessions offered to customers, the mobile checkout and the “come in and play with our toys” ethos.

A J. C. Penney news release did not explain why Ullman was leaving the chief executive’s post, but indicated it was part of a succession-planning process.

Though Vornado and Pershing Square bought more than a quarter of J. C. Penney stock in the fall and put their representatives on the board in January, this was not a move that was engineered by activist investors, according to people with knowledge of the situation. J. C. Penney had tried to poach Mr. Johnson before.

Mr. Johnson has invested $50 million in J. C. Penney “as a demonstration of his confidence in J. C. Penney’s long-term potential,” the company’s release said, by buying seven-and-a-half-year warrants on 7.257 million shares of J. C. Penney stock.