Amazon Could Turn Sears, JC Penney Stores Into Fulfillment Centers

What will the malls do with their empty department stores? Amazon has an idea. The behemoth is said to be discussing turning the large retailers into fulfillment centers.

The report, which comes from the Wall Street Journal, claims that Simon Property Group, an operator of hundreds of American shopping malls, has been in talks with Amazon.

“For Amazon, more fulfillment centers near residential areas would speed up the crucial last mile of delivery,” WSJ explains. “For Simon, turning over what was once prime mall space to fulfillment centers shows it would be willing to relinquish an essential way to bring in more mall traffic to secure a steady tenant.”

Amazon Prime offers two-day delivery to subscribers, but the health crisis has increased demand so much that the two-day wait can become much longer. Having more fulfillment centers closer to customers could cut down the wait time while Simon would benefit from having a financially-stable company renting space.

Simon and Amazon’s discussions did not start due to the pandemic emptying out storefronts, Reuters notes. In fact, they launched negotiations in early 2020 before the lockdown.

The department stores have both been in trouble for quite some time. Sears filed for bankruptcy in 2019, and they’ve been shuttering locations nationwide. Only 60 Sears locations will be left functioning after more closings this summer, Forbes reports.

JC Penney, meanwhile, filed for bankruptcy in May. They announced plans to close over 100 locations earlier this summer and are laying off over 1,000 employees.