Over the years, Martha Stewart has danced with retailers KMart and Walmart (among others). Now, the company is hitching its wagon to J.C. Penney.
JCP, who has been looking to ways to shift its fortunes, and re-invent itself, is announcing that it will spend $38.5 million for a 16.6 percent stake in Martha Stewart Living Omnimedia. The deal comes with The company also has asked for two seats on the Martha Stewart board.
As part of a 10-year partnership, J.C. Penney will introduce online and in-store areas dedicated to the Martha Stewart brand. And, most interestingly, the in-store areas will featured specially trained employees who will dole out tips and advice not un-similar to Apple's Genius Bar concept (according to NYT DealBook).
Of course, the Apple-esque concept is no surprise given that J.C. Penney recently hired Ron Johnson as CEO--the man who helped create the mystique surrounding Apple's successful retail operations. Johnson also is a former Target executive.
J.C. Penney also recently hired Target's top marketing executive, Michael Francis, as its new president. In addition, the company announced last month that it hired two of Johnson's former Apple colleagues, Daniel Walker and Michael Kramer, to serve as chief talent officer and chief operating officer.
The partnership is no doubt good news for J.C. Penney and Martha Stewart who has seen losses in eight out 10 of its most recent quarterly sales. And for its part, J.C. Penney has not kept pace with its retail sector--with sales at stores open at least a year dropping 1.6 percent, while those at Macy’s and Kohl’s rose 4 percent and 2.1 percent, respectively.
DealBook reports that Martha Stewart expects to earn more than $200 million from the arrangement, including royalty payments, design fees and advertising commitments. The company will continue its existing partnerships with other retailers, like Macy’s and Home Depot.
Additional source: U.S.A. Today