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J.C. Penney buys stake in Martha Stewart, forms 10-year retail partnership

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Department store company J.C. Penney Co. Inc. will pair up with Martha Stewart in a 10-year deal designed to strengthen its home and lifestyle business.

The Texas-based chain spent $38.5 million, or $3.50 a share, buying a 16.6% share in Stewart’s Martha Stewart Living Omnimedia Inc. Penney will also have a presence on Martha Stewart Living’s board.

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Inside the department stores starting in February 2013, products designed and curated by the domestic guru and sourced by Penney will be showcased in distinct retail spaces, the companies said. A related e-commerce site will launch the same year.

Martha Stewart Living is expected to reap more than $200 million in revenue over the life of the deal. The company already has products in stores such as Home Depot and Penney competitor Macy’s.

In October, Penney spent $267.5 million buying the Liz Claiborne brands and fashion-jewelry brand Monet. The jewelry is expected to show up in Penney stores by August 2012, while the chain has also ordered up exclusive Claiborne brands for its stores.

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-- Tiffany Hsu

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