In the latest Martha Stewart saga, Macy’s alleges Martha Stewart Living Omnimedia violated exclusivity terms of its contract when it agreed in 2011 to open Martha Stewart stores inside J.C. Penney’s stores.
1. Martha Stewart denied Macy’s allegations that she did anything unethical and said she was only looking to expand her brand. After reading the D’Innocenzio article, do you think that Martha acted unethically?
2. What is the current status of Martha Stewart Living Omnimedia’s financial health?
3. What could she have done differently to expand her brand and avoid a lawsuit? Discuss potential scenarios.
4. What are exclusivity agreements? Are they accounted for in the financial statements?
D’Innocenzio, A. (2013) Martha Stewart: J.C. Penney deal didn’t violate Macy’s contract. The Christian Science Monitor, March 5 (Retrievable online at http://www.csmonitor.com/USA/Latest-News-Wires/2013/0305/Martha-Stewart-J.C.-Penney-deal-didn-t-violate-Macy-s-contract-video).