Martha Stewart’s two-timing relationship with JCPenney ended the same way it began: with a last-minute phone call to Macy’s CEO Terry Lundgren.
In a humiliating defeat, the domestic diva said Monday she will exit the bulk of her troubled home-goods deal with Penney — a controversial contract that sparked an epic court battle with Macy’s nearly two years ago.
In dramatic testimony this spring, Lundgren said he abruptly hung up on Stewart after she called just hours before she and former Penney CEO Ron Johnson announced their secret tie-up in December 2011.
Noting that Macy’s already had an exclusive home-goods licensing deal with Stewart at the time, Lundgren said he was “shocked and blown away” by the news.
Nevertheless, Stewart on Monday afternoon did the same thing again.
“Martha did call Terry a couple of hours prior to the release with the news that an agreement [with Penney] had been reached,” according to a source. “It was just a brief conversation about the announcement to come.”
Indeed, sources said Stewart and Lundgren have turned what had once been a friendship into a strictly business relationship.
Still, Macy’s will continue to sell Martha Stewart-branded bedding, bath and kitchen products at its stores.
Penney CEO Mike Ullman this summer, as reported by The Post, moved to ditch most of the Stewart-branded goods, citing sluggish sales and ho-hum designs.
That’s despite the fact that Manhattan state court Judge Jeffrey Oing hadn’t yet ruled on the 10-year, $200 million deal. The Post reported Monday that Oing, absent a settlement, was ready to issue a ruling this week.
On Monday afternoon, Penney and Martha Stewart Living Omnimedia said they had “revised” their deal to include “a more focused range of product categories” that aren’t licensed by Macy’s, including rugs, lighting, window treatments and party supplies.
Penney will pay MSLO design fees and royalties for those goods, and withdraw its representation on MSLO’s board. The struggling retailer is giving back 11 million MSLO shares it bought as part of the December 2011 deal, when it shelled out $38.5 million for a 17-percent stake.
Macy’s, however, will continue to seek damages in the case, including lawyers fees and sales it claims it lost because of the competing line at Penney, said Ted Grossman of Jones Day, who is Macy’s lawyer in the case.
Grossman, who had grilled Stewart on the stand this spring about her secret negotiations with Penney, said he also was blindsided by the press release, which came at 4 p.m. Monday.