Amazon (NASDAQ: AMZN) has already been doing amazingly well throughout the year thanks to the coronavirus pandemic. However, as demand for one- and two-day shipping continues to rise, the online retailer is going to need to work to further improve its supply chain. As such, it appears that Amazon warehouses are going to put up in empty mall stores all across the country.
The Wall Street Journal went on to report over the weekend that Amazon is looking to make a deal with Simon Property Group, one of the largest mall operators in the country. With many retail stores and chains going out of business or drastically downsizing, there more empty retail space than there’s ever been. With in-person traffic being still a little down due to the COVID-19 pandemic, mall operators are looking for new ways to use this empty space.
More specifically, Simon Property Group is considering using its Sears and J.C. Penny stores as potential Amazon warehouses. Both department stores have filed for bankruptcy as they closed dozens of stores all across the country. According to Simon’s most recent public filing, the mall operator has around 63 J.C. Penny stores and an extra 11 Sears stores, all of which are pretty large in size.
While not all of these might be converted to Amazon warehouses, it seems like a good arrangement for both parties. The deal isn’t confirmed at this stage, but there’s a good likelihood that this will work out. The one big question this brings up is what will this mean for the future of mall operators like Simon? If the rise of e-commerce continues to be a prevalent trend, could an ever-increasing number of mall stores be converted to e-commerce fulfillment centers?
Amazon was also in talks with various mall operators about starting up its own grocery-store chain in various empty locations as well. J.C. Penny locations are some of the prime targets for this new venture as well. However, they might not be in the malls owned by Simons.
In the end, its more potential good news for Amazon. The company recently reported its fiscal third-quarter financial results, which were especially impressive. Revenues had shot up by a remarkable 40%, making it one of the best quarters in Amazon’s history. With the stock up over 50% since the start of the year and breaking new record-highs, things are looking quite good for the online retail giant.
Amazon Company Profile
Amazon is among the world’s highest-grossing online retailers, with $233 billion in net sales and roughly $311 billion in estimated physical/digital gross merchandise volume in 2018. Online product and digital media sales accounted for 53% of net revenue in 2018, followed by commissions, related fulfillment and shipping fees, and other third-party seller services (18%), Amazon Web Services’ cloud computing, storage, database, and other offerings (11%), Prime membership fees and other subscription-based services (6%), product sales at Whole Foods and other physical store retail formats (7%), and advertising services and cobranded credit cards (4%). International segments constituted 32% of Amazon’s non-AWS sales in 2018, led by Germany, the United Kingdom, and Japan. – Warrior Trading News
