Macy's CEO testifies in fight over Stewart
By The Associated Press
Published: Monday, Feb. 25, 2013, 6:39 p.m.
NEW YORK — Macy's CEO Terry Lundgren testified on Monday that he hung up on home diva Martha Stewart when she called to inform him on Dec. 6, 2011, that the company that bears her name had inked a deal with J.C. Penney to open shops within most of the chain's stores.
He hasn't spoken to her since, even though the two used to be good friends.
“I was sick to my stomach,” Lundgren testified in New York Supreme Court. “I can't remember hanging up on anyone in my life.”
Lundgren testified as Macy's Inc. and J.C. Penney Co. duke it out in court over the partnership with Martha Stewart Living Omnimedia.
Under Lundgren's leadership, Macy's has focused on building exclusive brands like Martha Stewart that are not carried by rivals to get shoppers to the store.
In the home area, exclusivity is key. Lundgren testified on Monday that Macy's had built the Martha Stewart brand to be the biggest in its home business. Sales last year were up 8 percent, double the rate for the entire company.
Lundgren said Macy's has spent 40 percent of its overall marketing on the Martha Stewart brand, even though the home category represents 17 percent of sales.
“I need the Martha Stewart business to be exclusive,” Lundgren said. “I don't have a substitute.”
The trial, which began on Wednesday, focuses on whether Macy's has the exclusive right to sell Martha Stewart branded cookware, bedding and other products. Other key witnesses expected to take the stand this week include Penney CEO Ron Johnson and Stewart, who founded Martha Steward Living.
Macy's sued Martha Stewart Living in January 2011, saying the company breached a long-standing contract when it penned the deal with Penney, which invested $38.5 million in a nearly 17 percent stake.
In a separate lawsuit, Macy's sued Penney claiming it had no regard for the Macy's contract and that Johnson had set out to steal the business that it had worked hard to develop.
The suits were consolidated for the bench trial. Supreme State Court Judge Jeffrey Oing is presiding over the trial, which is expected to last three weeks.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Consider carefully details, people involved in financial trust
- Is tech wreck on way?
- More women seize opportunities to start businesses
- ‘Sweet spot’ mid-cap stocks worthy of investor affection
- Pa. unemployment rate falls to lowest since 2008; 12,000 more enter workforce
- Lawsuit challenges Hollywood standard of unpaid internships
- Squeezed by competition, Chobani to expand offerings
- Emboldened by Italy move, QVC to expand into France
- Shale pioneer hires Chesapeake for drilling job
- Meat prices drain barbecue budgets
- Coca-Cola revenue up, but soda sales dip