Amazon wants to turn shopping malls into fulfillment centers

Amazon has been in talks with one of the largest mall owners in the country to turn over the abandoned spaces at shopping malls into large fulfillment centers. While we’re still waiting to hear more details about this year’s Prime Day, next year’s event might just be boosted by the space that Sears used to occupy. The Wall Street Journal reported Amazon has been talking with Simon Property Group, Inc. to move into the dozens of stores recently closed by Sears and JCPenney as both companies have filed for bankruptcy and shuttered businesses across the country.

Shopping malls were already in trouble before 2020 thanks to online retail just taking off. With COVID-19 wreaking havoc and keeping people at home, things are only getting worse. Many of these shopping centers have either spent a lot of time just plain empty or have struggled to regain the numbers they had before, which means a lot of bills and unpaid rent that an owner like Simon Property Group becomes responsible for. The deal with Amazon would involve renting the space instead of outright owning it.

JCPenney and Sears are considered anchor properties, too, in that those companies usually take up the largest retail space at malls. Simon Property Group owns 63 JCPenney stores and 11 Sears stores, which is a lot of potential warehouse space for Amazon. Plus, Simon is looking to acquire JCPenney outright, which would give the company even more control over how to use that space.

While Amazon has seen nothing but success during COVID-19, there was a time there where the company struggled to meet shipping demands. Having more centers spread across the country would give Amazon the potential to decrease shipping times across the board, even during high demand days. And this isn’t exactly an unusual move for Amazon, which has bought up out-of-business strip malls in the past.

Depending on how fast the deal goes through, Amazon’s new retail space could even impact this year’s Prime Day. We know the big sales event has been delayed to at least October, but there is still a lot to look forward to when those big sales finally drop.