Macy’s to Amazon: Not in my house

Department store claims covenant prevents competitor advertising

Macy's to Amazon: Not in my house
1313 Broadway in Manhattan, Macy’s CEO Jeff Gennette, Kaufman Organization President Steven Kaufman (Google Maps, Getty, Kaufman Organization)

Macy’s is fighting its landlord to defend its Herald Square flagship from an Amazon ad moving in atop the iconic location.

The retailer filed a lawsuit on Friday against the Kaufman Organization, which controls the billboard space atop 1313 Broadway. Macy’s alleged a restrictive covenant prevents a competitor — like Amazon — from advertising in the space, PincusCo first reported.

In the lawsuit, the department store claims it began to discuss a potential renewal of its lease for the advertising space with Kaufman in May 2021. At the time, Kaufman alleged it was in discussions with a “prominent online retailer,” which Macy’s was convinced was Amazon, though the company isn’t named as a defendant.

Macy’s says it reached out in June to see if the company had a counter-offer, but no resolution to the advertising issue was reached. Towards the end of August, Macy’s alleges lawyers for Kaufman claimed the real estate organization was not bound by any restrictive covenants and was prepared to move ahead with leasing the space to a different advertiser.

The 10-year-lease Macy’s signed for the billboard space expired at the end of August.

The department store is looking for a judge to verify the restrictive covenant and block Kaufman from putting up advertisements for any competitors in the space.

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Macy’s claims that an ad from an online competitor such as Amazon would cause “immeasurable” damage to its brand. Kaufman has yet to respond to the suit.

“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,” Macy’s said in the lawsuit.

In a statement to The Real Deal, a spokesperson for the Kaufman Organization said that Amazon has not been involved in discussions to advertise at the disputed space.

“While the restrictive covenant will be up to a judge to make a decision, we want to make it clear that we’ve had no communication or negotiations with Amazon relating to the 1313 Broadway space,” the spokesperson stated.

Amazon’s strength in the e-commerce market has played a massive role in the decline of department stores like Macy’s. Adding insult to injury, The Wall Street Journal reported last month Amazon has plans to launch brick-and-mortar locations similar to department stores.

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[PincusCo] — Holden Walter-Warner