NEW YORK -- Home decor and food guru Martha Stewart testified in court Tuesday that she did nothing wrong when she signed an agreement to open shops inside most of J.C. Penney's stores across the country.
Stewart testified in New York State Supreme Court in a trial over whether the company she founded breached its contract to sell cookware, bedding and other items exclusively at Macy's when she inked the deal with Penney.Stewart's appearance, which followed a lineup of other top brass, including the CEOs of both Macy's and J.C. Penney, attracted a lot of attention from the media -- so much so that the judge opened up the jury box to make room for the expanded audience, and spectators had to wait behind a roped line to enter the courthouse.During four hours of testimony, Stewart, who founded Martha Stewart Living Omnimedia, denied Macy's allegations that she did anything unethical and said she was only looking to expand her brand.In fact, Stewart said Macy's didn't uphold its end of the agreement to try to maximize the potential of her business. She said her brand had grown to about $300 million at Macy's, but the business was now "static" at the department store chain. She said she had hoped the business would exceed $400 million."We were disappointed," said Stewart, 71. "We got to a certain dollar amount and struggled and never got any further."The trial, which began Feb. 20, centers on whether Macy's has the exclusive right to sell some Martha Stewart-branded products such as cookware, bedding and bath items.Penney signed a deal in December 2011 with Martha Stewart Living to open shops at most of its 1,100 stores. A month later, Macy's renewed its long-standing exclusive deal with Martha Stewart until 2018, then it sued both Martha Stewart Living and Penney.Macy's is trying to block Penney from opening the Martha Stewart shops within its stores. The company also is seeking to stop Martha Stewart from providing any designs to Penney -- whether or not they carry the Martha Stewart label.Macy's attorneys have portrayed Stewart as someone who turned her back on a good friend, Macy's CEO Terry Lundgren, to broker a deal with a rival company. During testimony earlier in the trial, Lundgren said that he hung up on Stewart after she told him about the deal she had reached with Penney. He said he hasn't spoken to her since."I was quite taken back by his response, and when he hung up on me I was quite flabbergasted," Stewart testified Tuesday.Stewart said she always wanted to open big shops within Macy's stores, but the retailer never embraced that concept. Instead, she said the merchandise in Macy's stores is just "here and there."
Penney shares hit 4-year low
Shares of J.C. Penney fell 10.6 percent Tuesday after media reports said a large shareholder sold a chunk of the struggling retailer's stock.
The stock lost $1.78 to close at $14.96, its lowest price since March 2009.
Vornado Realty Trust, once the company's second-largest shareholder, sold almost half its stake, or 10 million shares, at $16.40 per share through Deutsche Bank AG, Bloomberg News reported, citing people familiar with the matter.
And on Tuesday, The Wall Street Journal, also citing unnamed sources, said that some Penney board members, including activist investor William Ackman, may want to sell the company or replace CEO Ron Johnson if a steep sales slide isn't halted. -- The Associated Press
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