JCP and Martha: All bets are off?

There are reports (unconfirmed by Penney) that it is dropping the Martha Stewart-branded product from its home store. My thoughts, as recently posted on RetailWire:

It’s unclear from the conflicting reports (from two divisions of News Corp.!) whether the JCP/MSLO deal is on or off. But it’s clear that dropping Martha-branded products (right now, only the party goods shop has her name on it) would represent a tremendous drain of company expense and effort, given the length of the Macy’s trial. Only the lawyers made any money on this one, even though the judge hasn’t ruled yet as of this writing.

The bigger question facing JCP is how quickly and how aggressively to discontinue any home store brands (or softline brands) that aren’t working. There may be contractual agreements in place with some vendors, especially if they helped pay for remodels. On the other hand, JCP could generate cash, traffic, inventory and floor space if it moved more urgently to drop the losers from the Johnson era — despite the short-term margin pain.


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