Macy's sues to stop Amazon from using billboard above its flagship store
For 60 years, Macy's has displayed its name on a three-story tall billboard above its flagship location in Manhattan's Herald Square. But the famed department store recently had to take down the signage after failing to renew an advertising contract with its landlord. Now, it's is suing to prevent ecommerce rival Amazon from using the space.
In a lawsuit filed in New York State court last week against the Kaufman Organization, a commercial real estate firm, Macy's claims that a 1963 agreement bars other retailers from advertising on the billboard. The store would suffer "incalculable damage" if Amazon were to advertise on the billboard, the complaint reads.
"[J]ust imagine Pepsi on a Coca-Cola building or Mercedes advertising on the building of a BMW dealership," Benjamin Brotzman, a principal in Macy's retail group, said in the court filings. "Akin to a conquering enemy, it would be as if a competitor hung its 'flag' on top of Macy's flagship department store and announced victory."
According to the suit, Macy's own agreement to advertise on the billboard expired August 31. By that time, the Kaufman Organization was already negotiating with a "prominent online retailer," which Macy's believed to be Amazon. Kaufman told Macy's the 1963 agreement didn't apply and that the landlord planned to "proceed with alternative advertisers."
Macy's believes it "continues to have rights relating to advertisements at that location," said company spokesman Orlando Veras. The retailer is asking for an injunction to prevent Kaufman from making a deal with Amazon.
Representatives for the Kaufman Organization did not return a request for comment from CBS News. Court filings show the company has not yet responded to the lawsuit.
Feuding for years
While Amazon is not named as a defendant in Macy's suit, the ecommerce giant and Macy's have been feuding for years.
With more and more Americans shopping online, department stores have struggled, with hundreds of locations closing in recent years. Macy's sales peaked in 2015, although the retailer has invested heavily in its online offerings and experimented with features like same-day delivery and summer sales to compete with Amazon's Prime Day.
In February 2020, the company announced plans to close 125 stores — 1 in 5 locations — and invest billions more in online shopping. It lost $4.5 billion last year as the coronavirus kept shoppers indoors and shuttered retailers nationwide.
For its part, Amazon has opened dozens of small retail locations in cities across the U.S. Last month, it announced plans to open its own department stores. The ecommerce giant controls half of all online spending and is facing a lawsuit from Washington, D.C., as well as a federal antitrust probe.