Amazon and the largest mall owner in the U.S. are reportedly in talks to use space formerly used by department stores for the online retail giant’s fulfillment centers.
Amazon and Simon Property Group have discussed converting former and current J.C. Penney and Sears locations, according to The Wall Street Journal, which cited unidentified sources. Dozens of locations for both stores are set to close after both chains filed for Chapter 11 bankruptcy, the Journal noted, adding that Simon currently owns malls with 11 Sears and 63 Penney stores, according to May public filings.
The coronavirus pandemic has only accelerated the financial problems malls have faced for years, even after large indoor spaces reopened in several states. By contrast, Amazon reported its all-time best quarter for sales this year as customers increasingly relied on it for shopping.
Big box department stores are often the largest retail spaces in malls, and are frequently a source of traffic flow to smaller tenants. However, Simon’s other tenants would likely not lead to much added foot traffic, and many landlords have instead opted to replace department stores with businesses such as gyms or theaters. Those institutions, however, have also been affected by the pandemic and are not in a position to expand, the newspaper noted.
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