News

J.C. Penney hopes 17 percent stake in Martha Stewart will pay off

December 6, 2011

J.C. Penney Co. will launch "mini-stores" in 2013 in hopes of reviving sales after the chain last month posted its first quarterly loss in two years.

Part of that plan lead to the Plano, Texas-based company's recent purchase of a 17 percent stake in Martha Stewart Living Omnimedia Inc. for $38.5 million, according to Business Week.

J.C. Penney agreed to pay $3.50 a share for the stake, 12 percent more than Martha Stewart Living's closing price on Tuesday, according to a joint statement today.

Martha Stewart Living surged 28 percent to $4 at 8:12 a.m. in New York. J.C. Penney fell 0.7 percent to $33.30 yesterday. It will gain more than $200 million in revenue from the 10-year agreement.