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    Martha Stewart faces a judge, defending professional reputation

    11:13 AM, Mar 6, 2013   |    comments
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    UNDATED (CBS) -- Nearly ten years after a stock trading scandal landed her in prison, Martha Stewart was back in court yesterday. This time, she was defending her professional reputation.

    Self-assured but soft-spoken, Martha Stewart testified she did not breach her contract with Macys when she inked a deal to sell her house wares at retail rival JC Penney.

    She told the court, "I keep looking at this entire episode of this lawsuit wondering why... it's a contract dispute...it just boggles my mind that we're here sitting in front of you, Judge..."

    Penney's approached the founder of Martha Stewart living Omnimedia in 2011, a time when Stewart claims Macys had not "maximized" the potential of her business as promised. Sales stalled at $300 million, she said, not the $400 million she'd hoped for. All while her parent company endured its fifth straight year of losses.

    The 71-year-old said, "We got to a certain dollar amount and struggled and never got any further."

    Retail analyst Brian Sozzi says, "If you go into Macy's stores they haven't done much with the brand. And what JC Penney is bringing to the table is creating little stores within the store. Making it interesting, creating interesting new product. And that product is going to be different."

    Penney's even bought a 16 percent stake in Stewart's company. But Macys lawyers portrayed Stewart as a partner who turned her back on an exclusive contract, forcing consumers to make a competitive choice.

    Opposing council asked isn't a shopper, "less likely to walk to the other end of the mall and buy another Martha Stewart...design?"

    Stewart answered: they're "going to buy...where...they feel comfortable shopping...where the price is the best and where they are getting the very best quality."

    Sozzi says, "I think Martha comes out a winner here because she is gaining interest in her brand. What I am worried about is what if JC Penney loses this. They have lost a big opportunity."

    Known for her dry wit, when asked by her own lawyer how she juggled her time running her empire... referring to her five month jail stint she replied, "I did my time."

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