(Corrects paragraph 4 to say that Macy's sued Martha Stewart
and J.C. Penney in 2012, not last year)
* Terms of settlement not disclosed
* Macy's says deal does not affect lawsuit against Penney
* Martha Stewart shares rise 8 pct to year-high
By Neha Alawadhi and Aurindom Mukherjee
Jan 2 Martha Stewart Living Omnimedia Inc
said on Thursday it settled a lawsuit with retailer
Macy's Inc over a home products deal with J.C. Penney Co
Martha Stewart did not disclose the terms of the settlement,
but said the deal would not be material to the company.
The company's shares rose as much as 8 percent to their
year-high of $4.55 on the New York Stock Exchange.
Macy's sued Martha Stewart and Penney in 2012 after the two
announced a partnership in 2011 to open Martha Stewart home
shops at hundreds of Penney stores.
The settlement frees Martha Stewart to move forward with its
deal with Penney, which could be incremental to its business,
Noble Financial Capital Markets analyst Michael Kupinski said.
Penney and Martha Stewart revised their agreement in
October, eliminating cookware, bedding and bath products, and
other merchandise to which Macy's claims exclusive rights under
a 2006 deal.
With its broadcast and publishing revenues falling, Martha
Stewart has been focusing on boosting its merchandise business.
The company's merchandise revenue grew 7 percent in the
quarter ended Sept. 30.
The business accounted for about 42 percent of Martha
Stewart's total revenue in the quarter, up from about 30 percent
a year earlier.
Macy's sued Martha Stewart for breach of contract and Penney
for interfering with its agreement with Martha Stewart. Both
lawsuits were combined last year.
Macy's also sought to stop Penney from selling any products
designed by home improvement doyenne Martha Stewart even if her
name doesn't appear on the items or their marketing.
Macy's said in a separate statement that the Thursday
settlement did not affect its outstanding claim against Penney.
Penney shares were down about 4 percent at $8.79 in
afternoon trading. Macy's shares were little changed at $53.10.
(Reporting by Neha Alawadhi and Aurindom Mukherjee in
Bangalore; Editing by Kirti Pandey)