Martha Stewart on Macy's Trial: 'It's Terribly Important That We Don't Lose'

Scott Stump
Martha Stewart speaking with Matt Lauer

Martha Stewart spoke out Wednesday for the first time since testifying in her court battle with Macy's.

On NBC's "TODAY," she recounted telling Macy's Chief Executive Terry Lundgren in 2011 that she was forming a business relationship with rival J.C. Penney.

Lundgren, she said, hung up on her.

"Terry Lundgren is the consummate CEO,'' Stewart told Matt Lauer. "He is an excellent businessman. He should be able to discuss business in a business-like fashion. Hanging up on a woman—businessperson—I think was rude and not right.''

Lundgren has not spoken to Stewart since that conversation, and Stewart told Lauer that he would not speak to Stewart's daughter after she reached out to him. Now, Macy's has sued Martha Stewart's company for breach of contract.

"He would not speak to anybody involved, and that's kind of wrong,'' Stewart said.

Lundgren testified Monday that he hung up on her after she told him about the deal only one night before it became public.

"I was completely shocked and blown away," Lundgren said. "I was literally sick to my stomach."

J.C. Penney announced on Dec. 7, 2011, that it would launch Martha Stewart boutiques in about 700 of its department stores in 2013. Macy's, which was one of the first companies to do business with Stewart's company after her 2005 prison stint for obstructing justice and lying to federal investigators about a stock trade, claims it has the exclusive right to sell her products in specific categories.

The lawsuit comes in the midst of reports that Stewart's company, Martha Stewart Living Omnimedia, has reported a loss of $56 million in the last year and laid off 12 percent of its staff.

"It's terribly important that we don't lose a case like this,'' she said.

Stewart believes that her agreement with J.C. Penney will not affect the sales of her company's products at Macy's.

"Really and truly we thought it would be good for Martha Stewart Living Omnimedia to be able to build 700 stores for the showcasing of Martha product,'' she said. "I think our product is so strong at Macy's that (the J.C. Penney contract) will not hurt that at all. We are there for the Macy's consumer. We want to be where the consumer needs and wants us.''

The dispute should have never reached this point, Stewart said.

"It should definitely have been resolved,'' she said. "It is a contract dispute. In our contract, we are allowed to have a store-within-a-store, or a Martha store (at J.C. Penney). That's what we were planning to do."

Michael Stone of Beanstalk Group Global Branding told TODAY: "What's best for her stockholders is for her company to prosper and thrive and have their profits increase, but the way she's going about doing it, I think in the end, is not going to be good for her brand or her company."

In her court testimony Tuesday, Stewart claimed that sales of her brand had grown "static'' at Macy's and that she was hoping the business would exceed $400 million a year instead of the $300 million business it has done. Lundgren claimed in his testimony that sales of Martha Stewart products at Macy's grew 8 percent last year and that it will "continue to highlight the brand" in stores.

"I think I did all right (on the stand),'' Stewart told Lauer. "It's a very difficult thing to sit there for four hours and be asked complicated, convoluted questions. I think I understood most of the questions and answered them fairly and honestly."