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Amazon and mall operator look at turning Sears, JC Penney stores into fulfillment centers
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Simon Property Group Inc., the biggest mall owner in the U.S., has been in talks with Amazon.com Inc. to turn some of its anchor department-store spaces into Amazon fulfillment centers, according to people familiar with the matter.
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For Amazon, more fulfillment centers near residential areas would speed up the crucial last mile of delivery. For Simon, turning over what was once prime mall space to fulfillment centers shows it would be willing to relinquish an essential way to bring in more mall traffic to secure a steady tenant.
Simon's discussions with the online retailer have been under way for months and began before the coronavirus pandemic, these people said. The two companies have explored converting stores formerly occupied by J.C. Penney Co. Inc. and Sears Holdings Corp. into Amazon distribution centers; in some cases, Simon and Amazon explored buying out occupied space from the retailers, these people said.
It wasn't clear how many stores are under consideration for Amazon, and it is possible that the two sides could fail to reach an agreement, people briefed on the matter said. Simon malls have 63 Penney and 11 Sears stores, according to its most recent public filing in May.
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Simon, which is the largest U.S. mall landlord by number of malls, is also considering other options for its vacated big-box spaces, say people familiar with the matter.
SIMON PROPERTY GROUP INC.
A number of U.S. malls are already doing business with Amazon, such as renting parking lots to Amazon's huge van fleets. But for Simon to lease a large, well-located indoor location would be the rare instance of a major mall operator offering prime retail space to Amazon.