JCP and Martha: Was the “juice worth the squeeze”?

It may be premature for RetailWire panelists to weigh in on the JCP/Macy’s/MSLO trial outcome, but we didn’t hold back. Here’s my point of view:

Without knowing exactly how the judge will issue his final ruling in this case, the JCP/Macy’s trial seems to be headed toward a “split decision.” I expect that JCP will be allowed to sell Martha-branded merchandise in non-exclusive categories like window treatments, but will need to sell Martha-designed products in “contract” categories under the JCP label. If I’m correct, this raises multiple questions:

1. Was the risk of infringing on the MSLO/Macy’s agreement worth it? Was the “juice worth the squeeze” in terms of how the Martha brand resonates with the new customer that Ron Johnson was trying to attract?

2. What does the entire chain of events say about Ron Johnson’s judgment? Clearly his recent firing by JCP reflects on a wide range of bad judgment calls, but this may have been the biggest public embarrassment.

3. If JCPenney ends up filling its new home stores with “JCP” product (instead of Martha Stewart), what did it gain?

On the last point, JCP has managed to develop product for which it is probably paying a rich licensing fee (and pricing it accordingly) after spending the cash to buy an interest in MSLO. “JCP at Home” could have been developed and sourced internally, for lower costs, sharper retails and better margins than this program is likely to produce.


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