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Settlement in Martha Stewart Living dispute

Colorado consumers may have heard that Macy's has announced a settlement to its lawsuit against Martha Stewart Living Omnimedia. The companies said that the accord in the contract dispute would not materially affect their businesses, and that they looked forward to a continuation of their successful partnership. However, Macy's said that its related lawsuit against J.C. Penney was not affected by this settlement and would move forward.

The lawsuits against both Martha Stewart and J.C. Penney were filed by Macy's after J.C. Penney signed a deal with Stewart's company in 2011 to create mini-shops under the Martha Stewart brand. Macy's had been the exclusive merchandiser of Martha Stewart Living items such as bath products and bedding since 2006. The retailer felt that this move violated its deal with Stewart's company, prompting the lawsuit against both companies. Even before the settlement announcement, Stewart and J.C. Penney had already reduced the line of products available in those stores. J.C. Penney said that it would continue to sell items not falling under the bath and bed category such as rugs, window treatments and party supplies. Terms of the agreement were not announced.

With its business segments struggling in a sluggish economy, Martha Stewart Living Omnipedia was still searching for ways to cut its ongoing losses. Conversely, Macy's most recently reported its quarterly net income increasing by 22 percent.

Exclusive licensing agreements and other business arrangements may become valueless in the face of a breach of contract. A business and commercial law attorney may be able to determine what remedies may be available to a client that has been damaged by such an action.

Source: ABC News, "Macy's, Martha Stewart Living Settle Dispute", January 02, 2014

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