Amazon may soon take over the spaces of bankrupt retailers it has left in the dust.
The e-commerce giant is in talks with mall owner Simon Property Group to turn anchor stores into distribution hubs, the Wall Street Journal reported.
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The main target for conversion appears to be Simon-owned stores formerly or currently occupied by J.C. Penny and Sears Holdings. The mall owner has 63 J.C. Penny and 11 Sears stores, and both department-store chains have filed for Chapter 11 bankruptcy protection and have been closing dozens of locations.
Simon — the largest mall owner in the U.S. with 204 properties — has been grappling with retail tenant closures in recent years even before Covid. The online shopping phenomenon has been giving brick-and-mortar retailers a run for their money for years. But the coronavirus forced many malls to temporarily close, worsening retailers’ bottom lines.
Amazon, meanwhile, reported a record $88.9 billion in second quarter sales. It’s also announced that it would increase its fulfillment center square footage by 50 percent this year.
Simon may have to rent the space at a discount: Warehouse rents are typically less than $10 a square foot, while department-store rents can be as low as $4 a square foot or as high as $19 a square foot.
Simon and Brookfield Property Partners are putting in a joint bid to take over the J.C. Penny chain, which would give them more control over the store space. [WSJ] — Akiko Matsuda