Macy's sues to stop Amazon from advertising on billboard above flagship NY outlet

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Macy's is suing its landlord, Rockaway KB Company, care of Kaufman Realty, for allegedly allowing the department store's direct competitor to advertise on the billboard. The said direct competitor, in this case, is Amazon, according to the lawsuit seen by MARKETING-INTERACTIVE. Macy's said that the billboard is on its department store and is "in its own right iconic". The billboard has also been the site of Macy's advertising for some 60 years and the lawsuit alleged that if Amazon or another competitor were to advertise on the billboard, the negative impact on Macy's would be "immeasurable".

"The damages to Macy's customer goodwill, image, reputation and brand, should a 'prominent online retailer', especially Amazon, advertise on the billboard are impossible to calculate," Macy's added in the lawsuit. Macy's right to advertise on the billboard expired on 31 August this year. Nonetheless, the lawsuit stated that a "restrictive covenant" inked in 1963 prohibits Rockaway from entering into an agreement with a Macy's competitor to advertise on the billboard, notwithstanding the expiration term of the agreement.

In the lawsuit, Benjamin Brotzman, a principal in Macy's retail group, also likened this to Pepsi advertising on a Coca-Cola building or Mercedes advertising on the building of a BMW dealership. "Akin to conquering enemy, it would be as if a competitor hung its 'flag' on top of Macy's flagship department store and announced victory," he added. MARKETING-INTERACTIVE has reached out to Amazon for comment.

The shift to online shopping and the pandemic has impacted retailers. Last year, Macy's said it will close 125 stores in "lower tier malls" and part ways with 2,000 employees over the next three years. The retailer said previously that the 125 stores account for about US$1.4 billion in annual sales.

Meanwhile, Macy's expanded its growth treatment to the remaining store portfolio, including upgrading an additional 100 stores last year. The growth treatment included improvements to the physical store and investments in merchandising strategies, technology improvements, talent and local marketing.

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Photo courtesy: 123RF

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