Simon Property Weighs Empty Mall Spaces as Amazon Centers: DJ

Daniel Fowler
August 10, 2020

Amazon is in talks to turn some empty mall spaces into fulfillment centers, according to a new report.

Amazon has also been in talks with multiple mall landlords about putting its coming grocery-store chain in J.C. Penney locations, a person familiar with the matter told Dow Jones, though it couldn't be determined if that included Simon malls. If the deal goes through, some of the abandoned department stores could be turned into Amazon distribution hubs, sources say; both Sears and JC Penney have declared bankruptcy and have been closing dozens of stores.

According to the Wall Street Journal, Amazon has been in talks with USA shopping centre group Simon Property over converting JCPenney and Sears department stores into storage centres for its online site.

The discussions between Simon group with the online retail giant started even before the COVID-19 pandemic took place. Amazon fulfillment centers wouldn't draw people other than their own employees. Both J.C. Penney and Sears declined to comment.

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"Amazon has a policy of not commenting on rumors or speculation", Rachael Lighty, a spokesperson for Amazon Operations, said. Simon Property Group at one time partnered with PREIT to own the Whitehall Mall but PREIT later reportedly joined hands with Washington Prime to own the mall. "With the current pandemic, industrial is the only thing left now".

Amazon on July 30 registered almost $89 billion in sales and $5 billion in profit for its second annual quarter, setting company records on both figures and blowing away Wall Street expectations as shutdowns pushed more shoppers online.

It would be interesting to see whether Amazon could reach an agreement with Simon to utilize the anchor stores in order to expedite its delivery process and ensure customer satisfaction. Amazon is truly focused on its "last mile" of delivery.

Big box department stores are often the largest retail spaces in malls, and are frequently a source of traffic flow to smaller tenants.

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