J.C. Penney Buys 16 Percent Stake in Martha Stewart Living Omnimedia

J.C. Penney has invested $38.5 million for 11 million Class A common stock — at $3.50 a share — for a 16.6 percent stake in Martha Stewart Living Omnimedia (MSLO). The retailer will also receive two seats on MSLO’s board.

As part of the 10 year deal, Martha Stewart mini-stores will be built inside J.C. Penney locations across the country. The staffers working those specialty stores will be trained to dispense Martha Stewart-like advice as well. The Stewart stores  — as well as a joint e-commerce site between the two brands — are expected to start popping up in February of 2013.

Lisa Gersh, President and COO of MSLO, said of the deal, “The strategic alliance we’ve announced today with J. C. Penney strengthens our balance sheet, will enhance the reach of our brands and expand our vibrant merchandising and media presence for the benefit of all of our partners.”

MSLO is expected to get around $200 million from J.C. Penney over the entire span of the deal.

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