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Amazon Reportedly in Talks to Place Fulfillment Centers in Mall Spaces

Amazon's alleged new move to place fulfillment centers in malls may not be cool with small retail.

Amazon is reportedly moving forward in talks with Simon Property Group regarding the conversion of mall spaces into fulfillment centers, according to an exclusive report from The Wall Street Journal.

This comes amid an unprecedented struggle for shopping malls to survive — both from the coronavirus crisis, but also from the wider disruption of brick-and-mortar retail by e-commerce.

THE AMAZON EFFECT: AMAZON GO STORES AND THE FUTURE OF RETAIL

Amazon reportedly engaged in talks to put fulfillment centers in malls

Amazon is reportedly moving forward in talks with Simon Property Groups to turn some of the latter's mall spaces into fulfillment centers. The talks began before the coronavirus crisis, and even before the last wave of bankruptcy filings from mall stalwarts including Nieman Marcus, JCPenney, and Lord & Taylor, reports The Verge.

This comes amid a general takeover of brick-and-mortar retail businesses — erstwhile shopping central for malls across the U.S. — by e-commerce juggernauts like Amazon.

Simon is the largest mall owner in the country and wants to fill empty retail spaces — especially ones left vacant by previous tenants like JCPenney and Sears who served as anchor tenants.

Amazon shipping closer-to-home

If Amazon makes the move to malls — placing fulfillment centers close to residential areas across the nation — the giant corporation could make deliveries more quickly, according to the WSJ.

While there's no final word on the number of stores Amazon may put up shop, nor how many smaller mall tenants might react to sharing a roof with the e-commercial retail superpower, it would be strange for a firm like Simon to lease space to Amazon without a go-between, according to the WSJ.

COVID-19 crisis boon to Amazon, doom for small retail

Several malls have replaced vacant stores with call centers and other non-retail companies just to stay open, Engadget reports. Obviously, the COVID-19 pandemic made these alternatives less viable.

With the coronavirus crisis devastated many retailers, Amazon raked in a second-quarter earnings double the net profit year-over-year, to $5.2 billion.

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