Macy's Reviews Martha Stewart Partnership Following J.C. Penney Deal

NEW YORK ( TheStreet) -- Macy's ( M) is taking a hard look at the Martha Stewart Living Omnimedia ( MSO) products it sells following a deal between the media company and rival J.C. Penney ( JCP).

"In light of the proliferation of Martha Stewart-branded product in the marketplace, Macy's is reviewing the Martha Stewart products sold at Macy's for potential changes in the future," says Macy's spokesperson Jim Sluzewski. "No decisions have been made at this time. Martha Stewart products in categories such as cookware, kitchen utensils, bed and bath will continue to be sold exclusively at Macy's until further notice. Martha Stewart is among a wide range of leading brands offered in Macy's home store and we will continue to expand and improve our home offering based on localized customer preferences across the country."

J.C. Penney and Martha Stewart Living announced a partnership this morning to create in-store Martha Stewart shops and e-commerce site in 2013.

The department store took a 16.6% stake in the media company, investing $38.5 million, or $3.50 a share. As part of the 10-year deal, J.C. Penney also will have representation on Martha Stewart's board. Martha Stewart Living said it will pay out a one-time special dividend to its shareholders of 25 cents a share.

Macy's deciding to pull some or all of its Martha Stewart branded product would be a huge pang to Martha Stewart Living, which in its third-quarter results called out its relationship with Macy's as one of the biggest boosts to its revenue.

Lisa Gersh, chief operating officer and president at Martha Stewart Living, said she expects all relationships to continue and that the deal with J.C. Penney should benefit the company as well as its partners.

Martha Stewart Living also sells branded products in Home Depot ( HD) and Michael's craft store, among others.

- Reported by Jeanine Poggi in New York.

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