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Two of the biggest names in US retail may be about to lock horns over a prime bit of advertising space in New York.

Old school retailer Macy's says that Amazon plans to advertise on a huge hoarding directly outside its flagship department store in Herald Square.

And the chain is suing the billboard's owner to try to stop it happening.

Macy's, which has advertised itself on the billboard for 60 years, says it would do it "immeasurable" damage if a direct competitor took the space.

Amazon declined to comment, while the hoarding owner, Kaufman Realty, denied it had been in talks with the online shopping giant.

, Macy's said it learned in May that Kaufman was in talks with a "prominent online retailer" about potentially renting the space - and that there was "little doubt" it was Amazon.

"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," it said.

It said the 2,200 square-foot hoarding, which wraps around the corner of its store, is "prominently seen and displayed", especially during its annual Macy's Thanksgiving Day Parade.

Macy's lease on the hoarding expired in August, but it says a deal signed in 1963 prevents Kaufman from allowing a competitor to advertise on the billboard in perpetuity.

"We expect to realise the benefits of these rights and have asked the court to protect them," it said in a statement.

Kaufman told the New York Post: "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."

Like many High Street retailers, Macy's has closed hundreds of US stores over the last five years as more people shop online.

Yet analysts say traditional US department stores have bounced back this year, as consumers flocked to shops after lockdown. Sales surged 59% at Macy's and 31.4% at Kohl's in the second quarter, and both have raise their outlook for the financial year.

In August, the Wall Street Journal reported that Amazon was itself planning to open several large bricks-and-mortar department stores in the US.

The online shopping giant, which is often blamed for the decline in High Street shopping, called the claims "rumours and speculation", but the newspaper said Ohio and California had already been earmarked as probable locations.