J.C. Penney Hit With $40 Million Lawsuit

J.C. Penney has been slapped with a lawsuit for allegedly breaching a contract regarding its new LED store fixture.

In December, the retailer commissioned visual merchandising and branding firm Hudson + Broad to create a store fixture that would change hues to match J.C. Penney’s color of the month (see February’s above). There was a catch: if the design was approved by J. C. Penney executives, the retailer would only order it from Hudson + Broad and not hand it over to another manufacturer.

According to WWD, J.C. Penney did just that and and now the firm is suing for $40 million:

“Top level executives at J.C. Penney, including those who report directly to chief executive officer Ron Johnson, asked Hudson + Broad to develop a unique fixture with the promise that the proprietary product, if accepted, would only be ordered from Hudson + Broad and that the concept would not be misappropriated and bid out to other manufacturers,” said James Maharg, president of Hudson + Broad. “Yet J.C. Penney is doing exactly what it promised it would not do — which is a huge disappointment from a company claiming ‘Fair and Square’ as its image.”

J.C. Penney hasn’t responded to the lawsuit yet. Despite the situation at hand, the firm still wants to produce the order and keep working with the retailer.

[WWD]

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