Since the Penney deal was penned in 2011, the department store's stock has cratered as many investors lost confidence in CEO Ron Johnson's turnaround efforts.
"Hindsight is 20-20," Koppelman said. "I think when J.C. Penney was talking to Martha, there was a great deal of hope that this was going to be an extremely exciting retailer. It still may be. I don't know Ron Johnson. I know Terry (Lundgren, CEO of Macy's) — he's a great retailer and a terrific manager."
In addition to Macy's, Stewart-branded products are also sold at a slew of other retailers, including Home Depot, Staples,PetSmart and Michael's. Koppelman said he didn't think this is too much.
On Tuesday, Stewart said her brand had been kept "static" at Macy's, adding that her company couldn't survive without growth.
Koppelman said he thought the smart move for Stewart's company is to figure out how to expand its brand in a thoughtful and profitable way.
"And if one of the ways to do that is to take categories that are non-exclusive at Macy's and put them in other environments — I mean we have had product at Wal-Mart, we've had product at other retailers — that's 'a good thing,' to quote Martha, and it's a good thing for the brand," he added. "And I think it perpetrates the brand."
-By CNBC's Katie Little; Follow her @katie_little_
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