By Phil Wahba

(Reuters) - Upscale coffee-press maker Bodum Group has sued J. C. Penney Inc Co <JCP. N> for breach of contract, saying the retailer did not deliver on its promise to build and roll out modern, chic shops within its stores to showcase Bodum's wares.

Bodum and Penney had reached a deal in November 2012 to have Penney prominently feature Bodum houseware products and Ordning & Reda office and stationery products as part of its now abandoned plan to transform its department stores into collections of "shop in shops."

But in a suit filed August 30 in New York State Supreme Court, family owned Bodum said Penney had missed the March 2013 date to launch the shops and installed boutiques at fewer stores than initially agreed on. Bodum also accused Penney of "haphazardly" placing merchandise throughout its stores.

Penney representatives did not return a request for comment.

To stem a 25 percent sales decline last year, Penney has largely reverted to selling middle-of-the-road, deeply discounted merchandise as it seeks to win back shoppers put off by its attempt to offer trendier products.

Bodum said it had spent $2.8 million in preparation for the launch. David Bennett, a lawyer representing Bodum, said damages have not been calculated yet.

Bodum had seen the Penney deal as a way to raise its visibility of its namesake brand and introduce the O&R brand to the U. S. market.

"Now, with JCP's inept and failed launched of this brand, it will be impossible to successfully relaunch the brand for a significant period of time," Bodum USA said in the complaint.

(Editing by Bob Burgdorfer)

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