Martha Stewart always insists on the finest — and this time she’s got JCPenney to foot the bill.
The domestic diva is demanding that extravagant materials be used for her new line of home products at Penney, despite the struggling department store’s downmarket image and the dwindling cash on its balance sheet, sources told The Post.
Cost-conscious Penney executives since last summer have resisted Stewart’s demands for top-quality fabrics, glass, stainless steel and even packaging materials, fretting that the retailer won’t be able to turn a profit on the goods, sources said.
But CEO Ron Johnson — a former Apple exec who is looking to take Penney more upscale as he mounts an aggressive overhaul of the chain — has overruled those executives and given 71-year-old Stewart free rein.
“Whatever [Stewart] wanted, they didn’t have a choice whether to buy it or not,” a former Penney exec told The Post. “It didn’t matter whether it was good-looking or what the price was.”
A Martha Stewart spokeswoman said, “Martha has a wonderful working relationship with JCPenney.”
Penney officials didn’t respond to requests for comment.
Amid overruns and delays, the cost of Stewart’s new products have soared between 10 and 30 percent above what they’re replacing, sources said.
That raises the risk of continued losses in home goods, which last year shrank to about 7 percent of the business from 16 percent the prior year, one insider said.
To make matters worse, a lawsuit filed by Macy’s, set to go before a New York judge tomorrow, charges Stewart’s tie-up with Penney violates terms of her pre-existing, home-goods distribution deal with Macy’s.
As reported by The Post, Penney — despite having invested $38 million in Stewart’s company last year as it cut a 10-year, $200 million licensing deal — is taking precautions accordingly.
Goods designed by Martha Stewart Living Omnimedia are slated to account for half of Penney’s home department. But only about 10 percent — window treatments, lighting and party supplies — will bear Stewart’s name once the line is rolled out in May.
The rest, including the crucial bedding and kitchenware businesses, will use the generic tag “JCP Everyday.”
Unless Stewart wins her court battle with Macy’s — a long shot, according to some legal experts — she won’t be able to promote it as hers.
That’s despite the white-glove treatment Stewart has given to the entire line — a process that some Penney employees found amateurish as well as expensive.
“Everything has been tested by her — she insists on sleeping on the sheets herself,” one source said. “If you’re smart, you can feel something and know if it’s going to be nice to sleep on.”
Stewart’s sway at Penney stands in sharp contrast to her relationship with Macy’s, in which the retailer calls the final shots on merchandise.
Penney execs won a skirmish, insiders said, when they balked at Stewart’s suggestion to use fabric from a supplier to luxury linen purveyor Frette.
But Stewart prevailed when she insisted on high-grade stainless steel for cutlery, and glassware made in Europe instead of China.
To get the latter, Stewart sent merchants on multiple trips to countries like Poland and the Czech Republic, sources said.
“When they first looked at it, the cost to make the goods was what Penney was hoping to retail it at,” a source said. “That’s when the trips started.”