The lawsuit comes in the midst of reports that Stewart's company, Martha Stewart Living Omnimedia, has reported a loss of $56 million in the last year and laid off 12 percent of its staff. "It's terribly important that we don't lose a case like this,'' she said. Stewart believes that her agreement with J.C. Penney will not affect the sales of her company's products at Macy's. "Really and truly we thought it would be good for Martha Stewart Living Omnimedia to be able to build 700 stores for the showcasing of Martha product,'' she said. "I think our product is so strong at Macy's that (the J.C. Penney contract) will not hurt that at all. We are there for the Macy's consumer. We want to be where the consumer needs and wants us.'' The dispute should have never reached this point, Stewart said. "It should definitely have been resolved,'' she said. "It is a contract dispute. In our contract, we are allowed to have a store-within-a-store, or a Martha store (at J.C. Penney). That's what we were planning to do."