Martha Stewart bringing products to J.C. Penney
Martha Stewart is headed for J.C. Penney.
The company started by the lifestyle maven has made a 10-year deal with J.C. Penney Co. that will bring her products to the department store chain beginning in February 2013. Penney spent $38.5 million, or $3.50 a share, buying a 16.6% share in Stewart’s Martha Stewart Living Omnimedia Inc., according to a news release put out by the two companies.
Penney will also have a presence on Martha Stewart Living’s board.
The Stewart products will be showcased in distinct retail spaces in the stores, the companies said. A related e-commerce site will launch the same year.
Martha Stewart Living is expected to reap more than $200 million in revenue over the life of the deal, according to the release.
It was unclear how the deal would affect the relationship Stewart has with other chains, including Penney competitor Macy’s, which sells cookware, kitchen utensils and bed and bath items endorsed by the domestic guru. In a statement, Macy’s said it would continue to sell the Stewart brand products “until further notice.”
“In light of the proliferation of Martha Stewart-branded product in the marketplace, Macy’s is reviewing the Martha Stewart products sold at Macy’s for potential changes in the future,” the company said. “No decisions have been made at this time.”
In recent years, Penney — which has about 1,100 stores in the United States and Puerto Rico — has been bringing in partners such as makeup brand Sephora and fashion brand M by Mango. In October, the chain spent $267.5 million, buying Liz Claiborne brands and fashion-jewelry brand Monet.
Ron Johnson, formerly an executive at Apple Inc., took the helm last month as Penney’s chief executive.
Penney had a profit of $389 million on revenue of $17.8 billion for its full fiscal 2010. But in the third quarter of this fiscal year, the company recorded a $143-million loss. In addition, its same-store sales slipped 2% year-over-year for the four-week period that ended Nov. 26, compared with a 9.2% increase in the same period in 2010.
Martha Stewart Living has been losing money for years.
Although revenue from merchandising jumped nearly 29% year-over-year to $12.3 million in the third quarter, Martha Stewart Living recorded a $9.7-million loss overall after suffering a $2.9-million loss the prior quarter.
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