After helping to expedite the demise of department store retail, Amazon is talking with the largest U.S. mall operator, Simon Property Group, about moving into the empty space.
- Simon Says. Mall mainstays J.C. Penney and Sears’ recent bankruptcies led to dozens of closures in Simon-owned malls. Simon needs new tenants fast because department stores are dropping like flies.
- Get out. Some mall tenants blame Amazon for killing retail, so they don’t want to share space with the firm. Plus, critics say the warehouses won’t generate as much foot traffic.
Amazon has already deployed this strategy by buying failed malls and turning them into fulfillment centers. FedEx and DHL have done the same.
How does it affect my wallet?
Your nearest mall might not ever reclaim its former glory, but those gigantic stores could ultimately find a second life as eCommerce warehouses.
If Amazon moves in, it could help the company make its rapidly-growing delivery network faster and more efficient to keep up with demand.
- Close to home. Unlike traditional warehouses, malls are typically close to population centers and main highways, so they’re attractive locations for distribution hubs.
It’s a tough time for malls, but large operators like Simon Property Group aren’t throwing in the towel. They’re looking at a variety of measures that could help them recover from the department store bankruptcies.
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