Macy’s has quietly settled a headline-making fight to block Amazon from advertising on the billboard located on the top of its “world famous” outpost on 34th Street in New York City. On the heels of filing suit against its Herald Square landlord Rockaway KB Company, LLC (“Rockaway”) in a New York state court in September in order to put a halt to a deal that would enable Amazon to advertise on the billboard, Macy’s and Rockaway appear to have resolved their differences out of court, prompting New York Supreme Court Judge Barry Ostrager to dismiss the case last month.
In a decision and order filed on December 15, Judge Ostrager revealed that the preliminary injunction lodged by Macy’s – to prevent Rockaway from allowing one of its competitors to advertise on the billboard, which had been the site of its own advertising for some 60 years – and “the action as a whole are resolved” in accordance with the Stipulation of Discontinuance without Prejudice that the parties jointly filed with the court in late November.
Macy’s had filed suit “enjoin Rockaway from its articulated intentions to allow a Macy’s direct competitor to advertise on the billboard situated on the land and building … in clear viola tion of [a] restrictive convent … that prohibits [Rockaway] from allowing such competitor’s advertisement.” That competitor was, of course, Amazon.
While Macy’s right to advertise on the Herald Square billboard expired on August 31, 2021, the New York-headquartered retail chain claimed that the expiration of the advertising agreement does not open the door for Rockaway to put just any ad on the billboard. As Macy’s asserted in its complaint, a restrictive covenant that has been in place since 1963 bars its competitors from advertising on the sweeping billboard that wraps around the side of the building that houses the Macy’s store. The long-standing covenant runs with the land, itself, per Macy’s, which means that it is not subject to the same expiration as its former deal with Rockaway.
Allowing a competitor (i.e., “any establishment selling at retail or directly to any customer”) to advertise on the billboard “would not only violate a longstanding restrictive covenant,” Macy’s argued, but it also would cause damage to Macy’s “customer goodwill, image, reputation and brand” in a sum that would be “impossible to calculate.”
More than merely a fight over a billboard, Macy’s shed light on the damage that it allegedly would suffer should Amazon (or another competitor) be allowed to plaster its ads on the side of the building, arguing that it operates in “a highly competitive environment and competes with, among others, department, specialty, and general merchandise stores, manufacturer and discount outlets, and online retailers, including Amazon, Target, Nordstrom, Kohl’s, etc.” Macy’s asserted that “the attack by online merchants on traditional brick and mortar stores like Macy’s is real and has been well documented.”
“Macy’s online business grows every year, [and] now more than ever, Amazon and other online retailers are direct competitors of Macy’s,” the retailer argued. “Akin to conquering enemy, it would be as if a competitor hung its ‘flag’ on top of Macy’s flagship department store” – which Macy’s says is “more than [its] flagship store; it is the most recognizable and famous department store in the world, [and] it is Macy’s “crown jewel” – and “announced victory.”
The terms of the parties’ settlement have not been made public, but as of the time of publication, Macy’s branding still appears on the billboard, suggesting that a resolution may have included a newly negotiated term for the parties’ previously-expired advertising agreement.
The case is Macy’s Retail Holdings LLC, et. al., v. Rockaway KB Company,655669-2021 (NY. Sup.).