Macy's Takes Legal Action Against Amazon Ads on Billboard Neighboring their Flagship Store
Macy's (M) has filed a lawsuit against Kaufman Realty Corp., alleging that allowing Amazon to display ads on a billboard near their Manhattan flagship store would cause irreparable harm to their business. According to court documents, Macy's has maintained the right to block competitors from advertising on billboards near their store since 1963.
The billboard in question, owned by Kaufman Realty Corp., is located on a neighboring building and often visible to millions of commuters, tourists, and local residents passing through the Herald Square, where Macy's flagship store has been located since 1902 (the store was originally opened in 1858, 20 blocks south).
The lawsuit states that Macy's has been displaying ads on the billboard since 1963, and the original agreement and subsequent agreements contained a clause that forever prohibited the billboard owner from leasing the space to any other retailer or selling it directly to consumers.
Macy's announced their intention to continue advertising on the billboard when the contract expired at the end of August 2023, but Kaufman Realty Corp. reportedly intended to lease the space to an "renowned online retailer," believed to be Amazon (AMZN).
Kaufman Realty Corp. officials argued that they did not believe they were bound by the 1963 agreement's restrictions, as stated in the lawsuit. Macy's alleged that the negative impact on its goodwill, reputation, and brand would be substantial if Amazon were to advertise on the billboard, leading to significant financial losses.
In response to the lawsuit, Amazon (AMZN) and Kaufman Realty Corp. declined to comment.
Macy's has had a rocky road in recent years as the retail industry has undergone significant changes, including the rise of e-commerce giants like Amazon. Macy's has struggled to adapt, eventually closing numerous stores to cut costs.
Last year, Lord & Taylor – a long-time rival of Macy's – closed all its stores entirely. Several other traditional competitors of Macy's, including Sears, JCPenney, and Neiman Marcus, have filed for bankruptcy and closed multiple locations.
While Macy's has fared better than many of its competitors, it has also shuttered numerous stores in the past decades to reduce costs.
Amazon has reportedly considered opening stationary retail stores, similar to department stores, according to Wall Street Journal reports from August.
The Macy's lawsuit against Kaufman Realty Corp. over blocking Amazon's ads on the billboard has been making headlines in recent days, with Rob Mclean of CNN Business contributing to the story.
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