August 9, 2020

Amazon reportedly wants to take over JCPenney and Sears stores to turn malls into giant fulfillment centers

[Business Insider]

  • Amazon is in talks with the biggest mall owner in the US to take over retail space and turn them into giant Amazon fulfillment centers, The Wall Street Journal reported Sunday.
  • The deal could involve Amazon taking over spaces formerly occupied by Sears and JCPenney, both of which have filed for bankruptcy and closed dozens of stores.
  • Amazon would benefit by gaining well-located warehouse space in cities and could decrease delivery time on orders, but fulfillment centers wouldn’t attract much clientele to ailing malls.

Malls across the US — struggling to stay in business as shoppers increasingly turn to e-commerce — could soon be transformed into Amazon fulfillment centers.

Amazon is reportedly in talks with Simon Property Group, America’s biggest mall owner, to turn empty retail space into Amazon warehouses that process and ship online orders, according to a Wall Street Journal report.

As part of the deal, Amazon could take over former anchor department-store spaces previously occupied by Sears and JCPenney, both of which have filed for bankruptcy and closed dozens of stores in recent months. Simon is pursuing an acquisition of JCPenney, which would grant the landlord more control over how current and former store spaces are used.

JCPenney is closing more than 150 stores. 
AP Photo/David Zalubowski

The deal could benefit Amazon by providing well-located warehouse space in cities across the US, potentially allowing the online retailer to decrease its delivery times on shipments. Some of Amazon’s existing fulfillment centers already occupy old strip malls that have gone out of business.

Amazon spokesperson Rachael Lighty told Business Insider that the company would not comment on “rumors or speculation.”

Mall landlords typically prioritize finding tenants that will bring in new customers, like stores and gyms. Amazon fulfillment centers wouldn’t draw people other than their own employees. But amid the COVID-19 pandemic, traditional retail stores have seen revenues waver, while Amazon’s sales have surged.

By Aaron Holmes

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