Indianapolis-based Simon Property Group Inc. has been in talks with Amazon.com Inc. to turn some empty store spaces abandoned by anchor tenants such as J.C. Penney and Sears into Amazon fulfillment centers, Bloomberg News reported Sunday, citing a report from Dow Jones.
Dow Jones, citing people familiar with the matter, said the discussions started before the pandemic. The two companies are exploring the idea of buying out occupied space from the retailers in some cases, the report said.
Amazon also has been talking to multiple mall landlords about putting its planned grocery-store chain in former J.C. Penney locations, Dow Jones reported, but it wasn’t clear whether that would include Simon malls. There are more than 60 J.C. Penney stores in Simon malls.
The report didn’t say how many stores Amazon is interested in, the source said, and it is possible talks could end without a deal.
Simon is partnering with Brookfield Property Partners LP to jointly bid for J.C. Penney, which filed for bankruptcy in May.
If Simon rents the space in prime areas as fulfillment centers, it would probably offer a major discount to what it would charge another retailer, Dow Jones said. Amazon’s presence isn’t likely to please other tenants, who typically count on big anchors to draw foot traffic to the mall.
Amazon has already bought some failed malls and turned them into distribution centers. And Simon hasn’t been shy in recent years about filling empty anchor spaces with non-traditional tenants.
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Gee is this a replay of Service Merchandise on a much larger scale?
At least you could enter Service Merchandise and view the goods that you wanted to buy. Amazon Fulfillment is just a huge warehouse.
I often wondered if a Service Merchandise concept would work. It would provide customers the chance to see, touch and even try merchandise before buying, which is desired for certain items. Then, deliver directly to the home rather than stocking shelves and moving inventory to brick-and-mortar stores. Also, the concept can provide a location to return items.
I was actually a fan of Service Merchandise.
This could be a great thing for people who live in Indianapolis and lack transportation to work at the current fulfillment centers in the surrounding counties. It may not be a traditional anchor store, but all those Amazon employees are also potential customers who will be in the area to eat and shop before and after work. It could generate new business for the remaining stores and restaurants that really need it.
Amazon is having problems with employee covid outbreaks and deaths in the fulfilment centers in Indiana and across the country. One known source of the the problems is a lack of social distancing in the warehouses, which were not designed with Covid in mind.
This issue needs to be factored into negotiations with Amazon to ensure a success for Amazon and the community. There are several news articles about this across the country. In addition, thirteen states Attorney Generals sent a letter with concerns to Amazon in May.