Macy's CEO shocked by Martha Stewart deal with J.C. Penney
By Karen Freifeld | February 26, 2013 7:42 AM EST
Lundgren, testifying on Monday in the trial of two Macy's lawsuits over the alliance, said Stewart told him of the deal the night before J.C. Penney announced it. He said he was so appalled he hung up on her.
"I was completely shocked and blown away," Lundgren said. "I was literally sick to my stomach."
J.C. Penney announced on December 7, 2011, that it would launch Martha Stewart boutiques in about 700 of its department stores in 2013. It also bought 17 percent of her company, Martha Stewart Living Omnimedia
Macy's, which has its own deal with Martha Stewart, sued her company in January 2012 for breach of contract, and later sued J.C. Penney as well. Macy's says it has the exclusive right to sell Martha Stewart products in certain product categories, including cookware and bedding.
The two cases were consolidated for a non-jury trial before Justice Jeffrey Oing in New York state court in Manhattan.
Lundgren, 60, said Stewart sounded like she was reading from a document prepared by lawyers when they spoke, and that he cut off the conversation when the home goods doyenne claimed her deal with J.C. Penney would be good for Macy's.
"I think that's when I hung up," said Lundgren. "The thought this was going to be good for Macy's was so far from anything I could comprehend."
Lundgren said that at the time he considered Stewart a friend, and he has not spoken to her since.
Macy's is still committed to the business relationship it developed with Martha Stewart Living Omnimedia, however. The Martha Stewart brand at Macy's grew 8 percent last year, growth that is twice that of Macy's as a whole, Lundgren said.
"This is an extremely important brand and we are going to continue to highlight the brand in our stores," Lundgren testified.
Macy's built Martha Stewart into its No. 1 home brand after Stewart came out of prison in 2005 after serving time for lying about a stock sale.
J.C. Penney CEO Ron Johnson is scheduled to take the stand on Friday. Martha Stewart also is expected to testify, but it is unclear when.
Martha Stewart shops in J.C. Penney stores, set to open in May, are the centerpiece of an improved home goods section that Johnson has called crucial to returning Penney to growth.
(Reporting by Karen Freifeld; editing by John Wallace)
Most Popular Slideshows
- ‘Sons of Anarchy’ Season 7 Finale Spoilers: Kurt Sutter On Ending The Biker Series And Picking The Right Song For The Final Ride
- Prince Charles’ Wife Camilla Parker-Bowles In Drug Scandal - Reports
- Prince Harry Kissing Mystery Blond, Cressida Bonas & Camilla Thurlow Are Distant Memory
- St. Louis Rams 28, Seattle Seahawks 26 [PHOTOS]
Join the Conversation
- Tourre on stand says email in SEC case 'not accurate'
- Syrian authorities blocking access to needy in Homs - Red Cross
- Faith in European Union at low ebb, EU poll says
- Former UBS banker gets 18 months, $1 million fine, for muni bid-rigging scheme
- U.S. judge halts challenges to Detroit's bankruptcy bid
- Galaxy Note 4 vs Redmi Note 2 vs iPhone 6: Samsung in Danger with Depressing Q3
- Apple Inc. (AAPL) Stock Set to Soar Beyond $100 Despite Decline After New iPad Launch
- iPhone 6 vs Nexus 6 vs Galaxy Note 4: Performance and User Interface Comparison
- Fappening: Message Board Posters Belittle Nude Photo Leakers As D-Listers Seeking Publicity
- Fappening: Lindsay Clubine, Wife Of Boston Red Sox Pitcher Clay Buchholz, & George Sampson Of Britain’s Got Talent, Are The Latest Victims Of Celebrity Nude Leaks
- U.S. Missile Shield In Europe Opens In Romania: Russia's Reservations Ignored
- Spain Offers To Train Iraqi Troops To Fight Back ISIS Militants: Kurdish Forces Making Gains In Kobani Against ISIS Surge