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Amazon is reportedly considering retail space for fulfillment centers

Amazon has had discussions with Simon Property Group about converting a number of shopping centers into fulfillment centers, The Wall Street Journal reported. Talks started before the coronavirus pandemic, and before the last wave of bankruptcy filings by well-known retailers such as Lord & Taylor, JCPenney and Nieman Marcus. It’s kind of a direct example of how ecommerce is catching up with the traditional brick-and-mortar retail chains that used to be at the center of the shopping experience.

Simon is the largest owner of malls in the US and wants to fill empty retail spaces, especially those left by former anchor tenants such as Sears and JCPenney. Having the fulfillment center warehouses closer to residential areas would allow Amazon to deliver faster, the WSJ notes.

It’s not clear where or how many stores Amazon is considering, or how smaller shopping center tenants might think about sharing a roof with the e-comm retail giant. Some malls in the US already rent out parking spaces to Amazon vehicles, but it would be unusual for a company like Simon to lease retail space directly to Amazon, as the WSJ points out.

While the pandemic has affected most retailers, Amazon reported in its second quarter earnings results that it doubled its net profit year over year to $ 5.2 billion.