Macy’s famed Herald Square flagship has worn its heart — or rather its star logo — on its sleeve for decades.
Turns out, though, that the giant red shopping bag declaring Macy’s to be “The World’s Largest Store” is on a slim bit of real estate at the site that Macy’s doesn’t actually own, but has leased since 1963.
And while the lease for the billboard has been regularly renewed over the years, it’s an arrangement that does not seem to have carried over to the age of Amazon — which the retailer alleged in a new lawsuit might put its own message at the center of the Macy’s universe by taking on the lease instead.
If it can.
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Whether or not Amazon or another retailer could take the bag is a question of contract law and is now in the hands of a New York state judge.
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But if Amazon, which has its own store and offices a block away on 34th Street, is symbolically looking to take a chunk out of Macy’s, it would speak to deep initiatives under way at the e-commerce giant.
Already, Amazon has taken a huge piece of the industry and is said to be the nation’s largest apparel retailer. Now the web giant could be making a more direct assault at Macy’s, the country’s largest department store, by opening a department store of its own, according to reports from the Wall Street Journal this year.
The fight wouldn’t really be a fair one. Amazon, a hydra-headed giant that does a little bit of everything, has a market cap of $1.7 trillion, while Macy’s is valued at under $7.7 billion. But Amazon still seems to have something to prove in fashion. The company is already trying to take on Farfetch and the other fashion platforms with its Luxury Stores business and with indeterminate success so far.
Amazon wants something more in fashion and is clearly willing to fight for it.
First, it seems destined to sit ringside as Macy’s fights to keep its own corner — almost literally — of the fashion that it has been a cornerstone of for so long.
Macy’s filed suit against Rockaway KB Co. last Friday to try to keep it from leasing out the space to competitors.
According to court documents, Benjamin Brotzman, a principal in the retail group of Macy’s Corporate Services, reached out to Ed Hart, the managing member of Rockaway, in May to renew the agreement for the billboard. But Hart said Rockaway was in discussions for the space with a very “prominent online retailer” understood to be Amazon.
After some back and forth, Macy’s lease on the space ended on Aug. 31 with the retailer saying a restrictive covenant tied to the land prohibits the space from going to a competitor and Rockaway arguing it’s free to do what it wants, according to court filings from the retailer.
“Since the early 1960s Macy’s has placed a billboard sign on the building adjacent to our flagship store at the corner of Broadway and 34th Street,” the retailer said in a statement. “Macy’s continues to have rights relating to advertisements at that location. We expect to realize the benefits of these rights and have asked the court to protect them. As the matter is in litigation, the company will not have any further comment.”
Rockaway could not be immediately reached on Wednesday. And an Amazon spokesperson said, “We are declining to comment at this time.” The spokesperson also passed on the reports that Amazon is ginning up a department store, noting, “As a matter of company policy, we do not comment on rumors or speculation.”
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