• by Erik Sass  @eriksass1, April 12, 2013

While the legal battle is far from over, J.C. Penney scored a courtroom victory over Macy’s with Friday’s decision by New York State Supreme Court Justice Jeffrey K. Oing that J.C. Penney can continue selling Martha Stewart-branded products while the case proceeds. Oing dismissed a preliminary injunction from Macy’s that sought to stop J.C. Penney from selling Martha Stewart goods immediately, before a final legal decision has been made.
 
Macy’s sued J.C. Penney and MSLO after they struck a deal in December 2011, in which J.C. Penney invested $38.5 million in MSLO and began developing branded mini-stores to hawk Martha Stewart-designed goods. Macy’s contends that MSLO’s deal with J.C. Penney violates the terms of MSLO’s earlier contract with the famed department store, which also sells a range of Martha Stewart-branded goods.

An earlier injunction stopped J.C. Penney from developing the mini-stores, but not from selling goods designed by Stewart under the J.C. Penney Everyday brand.
 
Oing explained his decision, in part, by noting the recent departure of Ron Johnson, who was largely responsible for the MSLO deal, as J.C. Penney CEO. After a tenure of just 17 months, Johnson was cashiered earlier this week following quarterly results showing the retailer’s revenues in a downward spiral.
 
While J.C. Penney is determined to hold on to its MSLO deal, other elements of Johnson’s attempt to give the retail chain a dramatic makeover are being ditched. Previously, J.C. Penney revealed that it would bring back special discounts and promotions, reversing Johnson’s decision to emphasize generally low prices.

On Friday, J.C. Penney board member and hedge fund boss William Ackman said the retailer would begin advertising discounts and promotions in newspapers again. Overall, however, Ackman still feels Johnson had the “right vision” for J.C. Penney, according to Bloomberg, which reported the news.