Amazon could end up dancing on the graves of department stores it has decimated by taking over their former homes in shopping malls, according to a report.
The e-commerce colossus has held talks with Simon Property Group — the nation’s largest mall owner — about opening fulfillment centers in the large anchor stores once dominated by retail chains, The Wall Street Journal reported Sunday.
The discussions have honed in on spaces that are the current or former homes of Sears and JCPenney, bankrupt chains that have a combined 74 stores in Simon’s malls, according to the paper.
It’s uncertain how many stores Amazon is targeting and whether the negotiations will ultimately produce a deal, the Journal reported. But if one were to emerge, it would reportedly create an unexpected alliance between a tech giant blamed for hurting brick-and-mortar retailers and a company whose business has long relied on big department stores.
A deal would also likely upset other retailers in Simon’s malls, given that Amazon’s distribution warehouses would help the company make deliveries even faster without drawing much extra foot traffic, according to the Journal.
Amazon spokeswoman Rachael Lighty said the company does not comment on “rumors or speculation.” Simon did not immediately respond to a request for comment Monday morning.
The reported talks came as the coronavirus pandemic accelerated a shift toward online shopping at the expense of retailers who had been struggling before the crisis hit.
COVID-19 has plunged big-name chains including Neiman Marcus, Brooks Brothers and J.Crew into bankruptcy amid stay-at-home orders that forced stores across the country to close. But Amazon raked in record profits on revenues of $88.9 billion in the second quarter amid a massive surge in demand for its products sold on its platform.
The Seattle-based conglomerate’s recent growth would make it a stable tenant for Simon, which owns more than 200 malls and other properties in the US, according to the Journal. Amazon has already turned some former malls into fulfillment centers, the paper reported.
Simon shares were up 4.3 percent in premarket trading at $64.88 as of 9:13 a.m., while Amazon shares were roughly flat at $3,170.00.