Macy's sues Martha Stewart Living

NEW YORK -- Macy's Inc. has sued Martha Stewart Living Omnimedia Inc. in a bid to block a licensing deal between the housewares company and J.C. Penney Co.

The lawsuit was filed Monday in New York State Supreme Court. Macy's claims Martha Stewart Living's deal with J.C. Penney violates the terms of an exclusive pact Macy's has to sell Martha Stewart Living products at its stores, according to reports in The Wall Street Journal and other publications.

The complaint comes after Plano, Tex.-based J.C. Penney acquired a 16.6 percent stake in Martha Stewart Living and announced plans last month to open mini-Martha Stewart shops inside most of its stores, beginning next year. The deal announced last month was seen as part of J.C. Penney's efforts to re-image itself under its new CEO Ron Johnson, a former Apple Inc. executive.

Cincinnati-based Macy's has asked the court for a preliminary injunction to block the deal.

Martha Stewart Living said it does not comment on legal matters, but issued a statement saying that it received a notification from Macy's that it intends to renew and extend its commercial agreement with Martha Stewart Living to feature and promote the Martha Stewart Collection in Macy's stores.

The New York-based lifestyle, media and merchandising company also noted that its commercial agreement with J.C. Penney remains in effect.

Calls and an email seeking comment from Macy's and its attorney were not immediately returned late Monday.

Macy's shares added 9 cents in aftermarket trading. The stock ended regular trading down 29 cents at $35.09.

Martha Stewart Living shares slid 15 cents, or 3.5 percent, to $4.15 in aftermarket trading after slipping 13 cents, or 2.9 percent, to $4.30 during the regular session.