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What: Shares of Martha Stewart Living Omnimedia (NYSE: MSO ) were looking fashionable today, climbing as much as 12%, and finishing up 9% after the company settled its dispute with Macy's (NYSE: M ) this morning.
So what: Terms of the settlement were not disclosed, but the media company said they were not material to its financial results. The dispute had started when Macy's sued MSLO and J.C. Penney in 2012 after those two companies formed a partnership to open Martha Stewart home shops within Penney's department stores, which infringed upon what Macy's claimed to be exclusive rights to the sell branded Martha Stewart merchandise. MSLO management said the resolution gives it the opportunity to "return our focus to what we do best -- bringing beautifully designed, high quality, affordable products to consumers nationwide."
Now what: The best part of the conclusion to the legal dispute seems to be that the effects were not material to Martha Stewart. Still, the company would seem to have bigger problems to deal with, as it's not currently profitable, and has seen sales fall in each of the last two years as the Martha Stewart brand continues to lose its star power. With the inexorable rise of digital media, the company's future looks even less certain. I'd tread carefully with this one.
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