The future of J.C. Penney under CEO Ron Johnson is not looking bright. E-mails which emerged in court this week, where Macy's has accused J.C. Penney of causing Martha Stewart to breach her exclusive contract with them, show that Johnson was aware of the legal breach. Calling Stewart his "new best friend," he wrote the "ball is in her court now to talk to Macy’s about a break in a tight, exclusive agreement they have with her." J.C. Penney was attempting to bypass the contract by setting up a Martha Stewart "store-within-a-store" inside their locations—though the facts that J.C. Penney would still provide employees and own, source and set the good's prices makes the plan questionable. Johnson admitted that he never read the Macy's contract himself—a mistake that one retail analyst called "astounding." J.C. Penney recently reported a $4.28 billion loss in sales and announced the layoff of 2,200 workers this week.