Shares of Martha Stewart’s company sank as much as 6.5 percent yesterday after The Post exclusively reported that the company’s controversial deal with JCPenney for home goods is coming to an end.
Penney CEO Mike Ullman has decided to ditch a line of Martha Stewart products amid disappointing sales and a year-and-a-half legal battle with Macy’s, which claims the deal violates its own licensing pact with Stewart.
Penney didn’t directly respond to The Post’s report, saying only that it was awaiting a New York judge’s decision on the Macy’s litigation.
“J.C. Penney remains one of our many retail partners,” Martha Stewart Living Omnimedia said in a statement.
“Our agreement with them is in force, and we have no intention of ending it.”
Shares of MSLO yesterday closed at $2.32, down 14 cents, or 5.7 percent. Volume was 714,000 shares, more than six times the daily average.
Penney shares, meanwhile, gained 72 cents, or 5.3 percent, to close at $14.22 on three times the normal daily volume.
Inked in December 2011 by then CEO Ron Johnson, Penney’s 10-year, $200 million licensing deal with MSLO has been a headache from the start.
In addition to legal hassles and sluggish sales, interim CEO Ullman has told employees Stewart’s designs have been lackluster, insiders say.
Wall Streeters said Penney’s stock got a boost partly on word that Ullman has decided to meet with investors next week at a retail conference hosted by Goldman Sachs.
“The bet is that if [Ullman] is calling a meeting, he might have something good to say,” said one Penney shareholder.