Macys expresses uncertainty about relationship with Martha Stewart after announcement of J C Penney deal

As discussed in a previous post, Martha Stewart has been successfully able to distribute her branded goods broadly across the retail planet, however, Macys did react to the news that she had sold a percentage of her company and would be building shop in shops in J C Penney's US wide. They did not end their relationship with her but indicated they would "re-visit" their product selection under her brand.

What likely will happen is a jockeying for position. Macys will keep Stewart's products if they are distinctively exclusive to the retailer and not somehow copied for inclusion in Penney's. Further, they probably will want to readjust their financial relationship with her to a more favorable one.

Macys is a higher level retailer than Penney's and has been fairing well in the economic downturn by offering unique and meaningful brands and products to its customer base. Stewart's line of home goods has been important to Macys so just giving it up likely would not be a good idea. Macys deal with Stewart expires end of 2012. They should renew. One iffy note. Apparently according to the Wall St. Journal, Stewart's company did NOT tell Macys about the Penney's deal until just before it went public which probably caused some major ill-will.

Altough Macys noted a concern about "brand proliferation" of Martha Stewart branded goods (too much of a good thing in too many places) I believe her brand is strong enough to do well in more types of retail concerns and I also believe Macys will see this too.

Watching out for you everyday.

Eli