J.C. Penney and Sephora reestablish relationship after lawsuit

The legal dispute threatened the closure of more than 600 Sephora in-store beauty counters

US department store chain J.C. Penney and Sephora have reestablished their 14-year partnership after a legal dispute that threatened the closure of more than 600 in-store beauty counters.

The spat began last month after the LVMH-owned beauty retailer reportedly threatened to walk out on their retail agreement, triggering J.C. Penney to file a lawsuit blocking the exit.

Sephora argued the agreement had been breached when J.C. Penney furloughed its boutique workers due to the coronavirus pandemic, according to Bloomberg, despite letting go of a selection of its part time and seasonal store workers in April.

In a statement, J.C. Penney said: “Both companies worked constructively to resolve outstanding legal matters and have agreed to mutually beneficial revisions to their joint enterprise operating agreement.”

The terms of the settlement have not been disclosed.

The store-in-store beauty experience offers a selection of make-up, fragrance, skin and hair care from brands stocked at Sephora.

Bankruptcy rumours have been looming over J.C. Penney since the coronavirus pandemic forced the Texas-based retailer to shut its stores in March.

Since then, it is reported to have missed two debt payments, amounting to US$29m.

J.C. Penney has reported debts of nearly $4bn this year.

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