J.C. Penney and Sephora make amends

By

Robin Driver

Published
May 8, 2020

Following a legal spat which saw Plano, Texas-based department store operator J.C. Penney accuse French beauty retailer Sephora of trying to back out of a long-term contract, the two companies have reaffirmed their partnership.

 
The debacle began earlier this week, when J.C. Penney filed a temporary restraining order against Sephora, accusing the Paris-based cosmetics retailer of attempting to gain “negotiating leverage” by threatening not to reopen the more than 600 shop-in-shops that it operates in the department store chain’s locations as they start opening their doors in line with loosening coronavirus restrictions in some U.S. states.

In this way, J.C. Penney alleged that Sephora’s ultimate aim was to alter the companies’ contract, which began in 2009 and was apparently due to continue for “several years,” by bringing its termination date forward to April 2021.

Sephora quickly hit back with a motion to dissolve, calling J.C. Penney’s accusations a “fanciful, one-sided narrative” and claiming that the two companies had actually been engaged in “good faith wind-down discussions” for some weeks, following reports of a possible bankruptcy filing from the department store retailer.
 
On Thursday, the two companies said that they had resolved the conflict, having agreed on unspecified alterations to be made to their partnership.
 
“Both companies worked constructively to resolve outstanding legal matters and have agreed to mutually beneficial revisions to their joint enterprise operating agreement,” said J.C. Penney in a release.
 
“JCPenney and Sephora have worked together over the past 14 years to serve our customers and be relevant in an evolving retail landscape,” continued the company. “Today’s amendment remains consistent with this shared goal and the companies are committed to continuing to expand and innovate SiJCP’s offerings in order to deliver the beauty experience customers expect in the future.”
 
J.C. Penney, which was already struggling with falling sales and a debt load of $4 billion prior to the onset of the Covid-19 pandemic, temporarily closed its approximately 850 stores throughout the U.S. in mid-March in line with government guidelines.
 
Seven of the chain’s locations in Texas have now reopened with reduced opening hours, while another four are operating via curbside pickup.