J.C. Penney Company, Inc. (NYSE:JCP) will stop selling the Martha Stewart’s home good products in its stores because the sales of the brand are poor, as reported by the New York Post. The report drove the stock price of the company higher by more than 6 percent to $14.42 per share on Thursday at the time of this writing.

J.C. Penney

J.C. Penney’s CEO made the decision

The report indicated that Mike Ullman, chief executive officer of J.C. Penney Company, Inc. (NYSE:JCP) made the decision. The New York Post obtained the information regarding the issue from insiders. According to them, “Mike said her designs aren’t that great. He says they’re not selling, and they’re nothing that your normal Joe Schmoe can’t come up with.”

Last year, Macy’s, Inc. (NYSE:M) filed a lawsuit against J.C. Penney Company, Inc. (NYSE:JCP) and Living Omnimedia, and argued that it had an exclusive contract to sell some of Martha Stewart’s products. The court is expected to issue its ruling regarding the case over the next few days.

“Ullman made the decision for the judge. They definitely are not going to carry [Martha Stewart home goods] any longer and [they are] not waiting for the court ruling,” says a source with knowledge about the situation.

Martha Stewart Living Omnimedia, Inc. (NYSE:MSO) issued a statement denying the report. According to the company, its relationship with the embattled department store chain did not change. “J.C. Penney remains one of our many retail partners,” the company said. “Our agreement with them is in force, and we have no intention of ending it,” says the company.

J.C. Penney’s agreement with Living Omnimedia

In December 2011, J.C. Penney Company, Inc. (NYSE:JCP) entered a 10-year $200 million agreement with Martha Stewart Living Omnimedia, Inc. (NYSE:MSO) under the tenure of its former CEO, Ron Johnson, as part of its strategy in transforming the home department of the retailer.

During the company’s earnings call last month, Ullman told investors that customers perceived some of the products of its home department as expensive, but he did not identify the brands. J.C. Penney Company, Inc. (NYSE:JCP) is trying boost the sales of its home department by offering 20% to 50% discounts.

Brian Sozzi, CEO of Belus Capital Advisors commented that the Every items of J.C. Penney Company, Inc. (NYSE:JCP) are too expensive. He said, “You are paying a premium that looks like the stuff in Target.”