Amazon Coming to a Mall Near You

Issue 31

08.10.20 - Amazon may replace closed box stores at struggling malls. The company has been in talks with Simon Property Group, the largest mall owner in the United States, to turn former JC Penney and Sears stores into distribution centers to deliver packages, according to the Wall Street Journal. Both large retail chains have filed for bankruptcy and are closing hundreds of stores nationwide.

The deal could make sense for both parties as the commercial landscape has shifted dramatically and many traditional brick-and-mortar stores are in serious decline. Amazon is looking for more space closer to where customers live as it builds out its one-day delivery strategy. Malls are typically located closer to highways and residential areas than mammoth warehouses, which would allow Amazon to speed up shipping times to customers.

Mall owners need tenants with cash to replace their bankrupt anchor stores. Although Amazon warehouses don’t attract much foot traffic, they'll help to pay the bills for many mall owners.

"It is a win-win for both sides," said Chris Walton, a former Target executive and now CEO of the retail blog Omni Talk. "Simon gets an anchor tenant and Amazon gets a more localized fulfillment center. For Amazon, the deal would also give it "a front-row seat into developing the mall infrastructure for the future."

Source: Wall Street Journal