Who's to Blame in the J.C. Penney vs. Macy's Battle over the Martha Stewart Brand?

Sometimes, licensing deals don’t work out exactly the way you want them to. But who is really to blame? I’m sure you’ve all been reading the news about Martha Stewart trying to circumvent her exclusive deal with Macy’s to do a different deal with J.C. Penney. It’s been all over the trades with the new CEO of JCP and the grand dame herself on the witness stand.

It makes you wonder what is going on…

·       Has Macy’s failed to fulfill their contractual obligations?

·       Are they not doing enough to support the Martha Stewart brand in their stores?

·       Or is Martha Stewart just being greedy?

Which leads me to the point of this blog: picking the right licensees isn’t always easy. You must evaluate the quality of the manufacturer’s product, ensure that their distribution network and strategy are strong and that they have the ability (both financial and technical) to actually market the product once it is on store shelves.

Hopefully, you pick successfully more often than not, but sometimes you make a mistake and the licensee either doesn’t support the brand the way that they outlined they would in their proposal, they are unable to get retail placement or they don’t make the product at all (this last to keep a competitive product off store shelves – nasty business to be sure!).

So how do you determine the best partners?  

1.     First make sure to get all of the necessary information from the manufacturer – company overview, financial statements, etc. Anything they will provide to support that they are a reputable business.

2.     Review their product line and current distribution. If they already have a line in Target, chances are they have a decent relationship with the Target buyers and have a better chance of getting your product line placed there as well.

3.     Ask your colleagues or request references. The licensing world is pretty small. Chances are someone you know, knows this company and will gladly give you their thoughts about your decision.

From there, you have to rely on your experience and knowledge to make an educated decision. And regarding the Martha Stewart/Macy’s/J.C. Penney debacle, I believe that if you are happy with a partner you won’t want to get out of a deal.  This makes me think there is something bigger going on here, but that’s just my outsider’s 2¢ worth.