J.C. Penney will invest $200M in Martha Stewart Living Omnimedia over the next decade as part of a strategic alliance that will put Martha Stewart stores inside most of the 1,100 outlets of the department store chain. Its initial $38.5M outlay gives Penney a 16.6 percent stake in MSLO.
Penney CEO Ron Johnson, architect of Apple’s retail strategy who recently took the helm at the retailer, called the deal a “once in a lifetime opportunity.”
The Martha Stewart brand “embodies quality, beauty, inspiration and possibility and we intend for Martha Stewart stores to be a key centerpiece of our new strategy to transform J.C. Penney into America's favorite store,” he said in a statement."
Penney also expects to benefit from cross promotional activities with MSLO’s roster of magazines, digital and broadcast properties.
The Plano, Tex.-based department chain also revamped its PR roster, dropping M Booth, which is part of Next Fifteen, as agency of record Interpublic’s entertainment –oriented PMK-BNC unit picks up the assignment.
Margi Booth said she’s delighted to have served Penney for the past six years and wishes it well as the chain seeks a new direction.
Penney lost $143M during the quarter ended Oct. 29 following $265M in restructuring charges. Revenues slipped 4.8 percent to $4B.