J.C. Penney, Martha Stewart scale back partnership NEW YORK As a court ruling looms, J.C. Penney Co. (JCP) is scaling back its partnership with Martha Stewart. The department store chain will no longer be selling certain home and bath products designed by Martha Stewart Living Omnimedia Inc., two companies said Monday. Penney will sell a smaller batch of Martha Stewart products, like window treatments and party supplies. It also will be selling the media and merchandising company back 11 million shares. Penney and Martha Stewart signed a merchandising deal, including the stock investment, in December 2011. That prompted Macy's Inc. to sue both companies for violating its exclusive agreement with Martha Stewart. A judge has been expected to rule in a court battle between Penney and Macy's over whether Macy's has an exclusive right to sell some of her products.