Amazon Could Use JCPenney, Sears Stores As Fulfillment Centers: Report

What Happened: Amazon.com Inc AMZN is in talks with Simon Property Group Inc. SPG, the biggest mall owners in America, to convert some of its anchor-department store spaces into Amazon fulfilment centers, The Wall Street Journal said on Sunday.

The discussions are on between Amazon and Simon property group to utilize some closed J.C. Penny and Sears stores for Amazon fulfilment centers. There is no confirmation on the exact number of stores that are currently being considered.

Why It’s Important: More fulfillment centers near residential areas would mean a speedy "last mile" of delivery for Amazon, The Wall Street Journal said. Amazon is truly focused on its “last mile” of delivery. Not only they recruited new drivers to deliver goods, but they also toyed with the idea of using drones to deliver the packages.

The discussions between Simon group with the online retail giant started even before the COVID-19 pandemic took place. The two organizations explored the idea of converting stores formerly occupied by J.C. Penney Co. Inc. and Sears Holdings Corp. into Amazon distribution centers.

According to The Wall Street Journal, the talks reflect the intersection of two trends that predate the pandemic but have been accelerated by it: the decline of malls and the boom in e-commerce.

What Next: Simon and Brookfield Property Partners LP have put in a joint bid for J.C. Penney, which filed for bankruptcy in May, the report said. The take-over would give them control over the store space. It would be interesting to see whether Amazon could reach an agreement with Simon to utilize the anchor stores in order to expedite its delivery process and ensure customer satisfaction.