Simon Property Group, one of the largest US real estate companies, is in talks with Amazon for the sale of some of the spaces of the Simon department store it owns, writes the Wall Street Journal. In particular, we talk about some of the premises previously occupied by the JC Penney store chain, which filed for bankruptcy on May 15, and the stores of Sears Holdings, a large retail company that went bankrupt in 2018.
The spaces should be transformed into distribution centers that Amazon would use as “minor” warehouses for various types of products, from books to household appliances, to bring them closer to inhabited areas than to department stores in industrial areas, thus optimizing logistics and accelerating lead times. delivery.
For now, from the anonymous sources cited by Wall Street Journal, it is only known that there have been meetings between the representatives of the two companies but neither of them has made official comments about it. Regardless of how it turns out, this is very representative news of the great crisis that malls and stores are going through due to the growing success of e-commerce.
Online shopping has been on the rise for years, but the months of lockdown due to the coronavirus pandemic have had a major impact on consumer habits: while most stores and malls have been forced to close their businesses for months, in the second quarter of 2020, Amazon posted unprecedented revenue of $ 88 billion.
In the past, Amazon or other large logistics companies such as FedEx and DHL had already converted entire shopping malls into distribution centers. It is also not the first time that large malls still in business do business with Amazon, for example by renting parking spaces for vans. But it would be the first time that a company that manages shopping centers like Simon has deprived itself of a high-end retail space to convert it into a warehouse. If the deal were to actually go through, Simon Property Group would at least partially renounce the business model that made shopping centers so successful, that of concentrating many stores in the same place to mutually exploit customer traffic.
Amazon’s warehouses wouldn’t bring new customers to the mall, but they would welcome a large number of employees. Also for this reason, Simon malls have recently partially replaced some of the shops with services that could regularly intercept Amazon workers, such as restaurants for lunch breaks, gyms, cinemas and other types of entertainment. Those who manage these services pay the rent of the premises as much as a normal shop, that is, less than what is usually requested from catering services and other activities outside the shopping centers.
At the moment, there are 63 JC Penney and 11 Sears stores in Simon Malls, but it is unclear how many of these places Amazon is interested. It is not even known how the other retailers currently hosted in the Simon shopping centers will take it, given that a greater presence of Amazon in the territory could damage them. Again according to the sources of Wall Street Journal, before meeting Simon Property Group, Amazon had already started some negotiations with other shopping centers to take over some of the spaces previously occupied by JC Penney for its supermarkets without checkouts.
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