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JC Penney hit with contract lawsuit in new battle with Macy's

For the second time this year, Macy's has filed a lawsuit over an ongoing contractual disagreement regarding Martha Stewart Living Omnimedia products. Macy's claims they have an exclusive right to sell the products, but earlier this year MSLO penned a deal with J.C. Penney for the similar rights.

That spurred Macy's to file suit in January against MSLO for breaching their contract; and now Macy's is going after their retailing rival, as they claim J.C. Penney "induced" MSLO to breach a contract known to exist by all parties involved.

Why are MSLO products important enough to J.C. Penney that they would risk the legal wrath of breaching another contract? J.C. Penney is going through an organizational change under a relatively new CEO who used to work for Apple. The idea for J.C. Penney is to have "stores within stores" -- specialized stores that exist within a single J.C. Penney that carry the name of major fashion brands. J.C. Penney wants Martha Stewart to come on board for this new idea.

Organizational change can happen to any business -- big or small, and regardless of industry. Adapting is the key to survival, and J.C. Penney's new structure might help the department store not only survive, but thrive in the future. However, when anyone goes about changing their business model or considers a radical alteration to their organization's plans, it is always best to consult the legal side of the move, so as to avoid unwanted confrontation.

To learn more about the topics discussed in this post, please visit our Fairfax business litigation page.

Source: Crain's New York, "Macy's files another suit over Martha Stewart," Aug. 16, 2012