Macy’s sues to block an Amazon ad on the billboard next to its flagship store

Although the 2,200 square foot billboard appears to be on Macy’s property, it is actually attached to an adjacent building owned by a unit of Kaufman Realty Corp., which also owns the billboard. display.

Macy’s lawsuit claims it has advertised the billboard since it was built in 1963, and that the terms of that agreement, and all subsequent agreements, included a clause that the owners of the billboard would ‘display will be forever limited’ from selling top space to any other ‘retail establishment or direct to any consumer’.

Macy’s said with his contract expiring at the end of August this year, he made an offer to renew the ads on the billboard and learned that Kaufman intended to lease the space. to a “big online retailer,” which Macy’s understands to be Amazon. The lawsuit said Kaufman’s rep said they did not believe they were bound by the restrictions in the 1963 contract.

“The damage to Macy’s customer base, image, reputation and brand if a ‘top online retailer’ (particularly Amazon) advertised on the billboard is unworkable. calculate, ”the complaint filed last week said. “Macy’s continues to have rights to the advertisements there,” the retailer said in a statement. “We hope to realize the benefits of these rights and have asked the court to protect them.” Amazon (AMZN) and Kaufman both declined to comment on the lawsuit.

The department store industry has been in decline for decades, with several longtime Macy’s rivals such as Sears, JCPenney and Neiman Marcus filing for bankruptcy. Another, Lord & Taylor, closed completely last year. The shift to online retailers like Amazon is only part of the challenges facing department stores.

By comparison, Macy’s has done better than many of its traditional rivals, but it has also closed many of its stores over the years to cut costs.

Meanwhile, Amazon is reportedly considering opening physical outlets similar to department stores, according to a report in the Wall Street Journal in August.

The lawsuit says Macy’s quit the billboard at the end of August when his contract expired and he couldn’t come to an agreement on a new one. News of the lawsuit first appeared in Crain’s New York Business.

– Rob Mclean of CNN Business contributed to this report