Sign of the retail times: Macy’s sues to block Amazon from taking over signature NYC billboard

The iconic billboard next to the Macy’s flagship store at New York’s Herald Square. (Photo by jpellgen (@1179_jp), via Flickr, Creative Commons 2.0.

Macy’s is suing a real estate company to prevent Amazon from taking over the iconic billboard next to its landmark department store at West 34th Street and Broadway in Manhattan, citing the terms of a contract signed on Aug. 7, 1963.

To say that Amazon wasn’t around back then is an understatement. Jeff Bezos wasn’t born for another five months. ARPANET, the U.S. Department of Defense’s forerunner to the Internet, didn’t start running until the following year.

But the 58-year-old contract, filed as an exhibit in the Sept. 24 lawsuit in New York state court, includes a provision that says the billboard “shall be limited forever” from being used by anyone other than Macy’s for advertising that refers “to any establishment selling at retail or directly to any consumer.”

[See the full text of the contract, and the Macy’s complaint.]

Macy’s contends that the restriction remains even though its lease of the billboard ended on Aug. 31. The “prohibition runs with the land forever,” the lawsuit says.

The real estate company, the Kaufman Organization, argues it’s not bound by the restriction, according to the suit.

The suit recounts a May 21 conversation in which Ed Hart, CEO of the Kaufman Organization, informed Macy’s real estate leader Benjamin Brotzman that his company “was in discussions with a very ‘prominent online retailer’ concerning the advertising on the Billboard.” The suit says there was “little doubt that Mr. Hart was talking about Amazon on the call.”

Macy’s says in the suit that the billboard “is viewed annually by the millions of tourists, residents and commuters of New York City,” and is “prominently displayed and seen, especially during the Macy’s Thanksgiving Day parade.”

“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,” the suit says.

Macy’s asks the court to declare that the restrictive covenant is valid, and to issue an injunction to ensure it is enforced.

Crain’s New York Business first reported on the lawsuit.

The e-commerce giant and the longtime retailer have another connection that extends across the country to Amazon’s home base of Seattle. In 2017, Amazon announced that it was moving into office space in the downtown Macy’s that was once home to The Bon Marché department store. The company now occupies most of the floors in the building at 300 Pine St.

Amazon also chipped in $250,000 to help repair and strengthen the Macy’s Christmas star, a Seattle landmark that lights up on the historic building every holiday season.

GeekWire reporter Kurt Schlosser contributed to this story.

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