Martha Stewart Upstaged at the Courthouse by Lamar Odom

Martha Stewart finally took the stand to testify in the trial between her company, Macy’s, and J.C. Penney over the right to sell her branded homewares. The courthouse was nuts not only because of Stewart’s presence, but because by coincidence, Lamar Odom had to testify at a child-custody hearing in a different courtroom at the same time.

Stewart launched a licensed homewares line in 1997 with K-Mart, but signed a contract to produce a similar line for Macy’s in 2006. Macy’s is not the only retailer Stewart’s company is in a partnership with — she also has her Home Depot furniture line, and for the first two years of her Macy’s contract, her K-Mart deal was still in effect — but Stewart did sign a contract that gave Macy’s an exclusive right to sell certain categories of products. The only exception was if Stewart decided to launch her own network of retail stores — in that case, those stores could also stock Martha Stewart-branded products for the home. In 2011, Stewart signed a deal with J.C. Penney to sell a different homewares line via Martha Stewart kiosks located within Penney’s stores. Macy’s sued J.C. Penney and Martha Stewart; Martha Stewart and J.C. Penney each counter-sued. The outcome of this clusterfuck of lawsuits will have a major impact on U.S. retail.

Stewart explained that she sought to enter into an agreement with J.C. Penney because Macy’s hadn’t lived up to its obligations. Namely, she said, it was her responsibility to her shareholders to deliver growth, but Macy’s was failing to allow the business to thrive and did things that limited sales, like failing to integrate Martha Stewart products into its bridal registry (which it had allegedly promised to do):

“Macy’s is a $300 million business for MSLO,” Stewart offered. “I don’t want it to go away, but I thought our business would be much bigger than $300 million after five years.”

When Macy’s lawyer challenged her on the issue of her opening Martha Stewart stores within J.C. Penney locations, a move which he said was intended to exploit the “loophole” in the Macy’s contract that permitted Stewart to open her own retail stores, Stewart protested that the store-within-a-store model is a very old one. She offered the three-story Louis Vuitton store inside Macy’s Manhattan flagship as an example.