The Post story boosted J.C. Penney stock more than 5 percent Thursday, USA Today reported. The price of Martha Stewart Living Omnimedia fell more than 6 percent.
Mike Ullman, J.C. Penney's chief executive officer, inherited a 10-year contract signed by his predecessor, Ron Johnson, in 2011. But a judge ordered the retailer to take Stewart's name off most of the items in her line, which were sold under the less evocative "JCP Everyday" label.
The J.C. Penney deal set off a three-way legal fight. Macy's said the contract violated its licensing agreement with Martha Stewart Living Omnimedia, the home design guru's corporate face.
The Post quoted a source described as "an insider close to the company" who said Ullman is not a Stewart fan.
"Mike said her designs aren't that great," the source said. "He says they're not selling, and they're nothing that your normal Joe Schmoe can't come up with."
New York Justice Jeffrey Oing has heard testimony on the dispute but has not made a final decision. Ullman considered a settlement with Macy's but pulled back for fear of another lawsuit from Stewart, the Post said.
Ullman returned to the company for a second stint as CEO in April. Johnson, who had been a successful retail executive at Target and Apple, had been brought in to J.C. Penney in hopes of transforming the struggling chain but instead made changes that alienated existing customers without bringing in new ones.