Purchasing center operator Simon Property Group Inc. has been in talks with Amazon.com Inc. for some of the empty store spaces formerly occupied by key tenants such as JC Penney Co. Inc. and Sears Holdings Corp. Amazon’s distribution centers, The Wall. Street Journal reported, bringing up other people familiar with the matter.
Discussions began before the coronavirus pandemic, and in some cases corporations explored the concept of repurchasing the occupied area of stores.
Amazon has also been in talks with several mall owners to establish its next grocery chain at J.C. Penney stores, a user familiar with the matter told the Journal, though it is not imaginable to find out if this included Simon Malls.
Penney has 63 retail outlets at Simon Malls and Sears has 11 outlets, according to its annual report.
It was unclear how many retail outlets were thought for Amazon and it is imaginable that the two sides will not reach an agreement, the news service said.
Simon’s stock closed with a 5.3 percent hike in New York on Monday. Stocks have fallen by 50% this year. It is partnering with Brookfield Property Partners LP to submit a joint bid for J.C. Penney, which filed for bankruptcy in May.
Selling the anchor store area to privileged locations on Amazon would be a major replacement in the mall sector. If Simon rents the area as a distribution center, he will most likely settle for a significant reduction compared to what might qualify some other retailer, the Journal reported. Nearby tenants won’t be interested in the choice either: distribution centers attract less pedestrian traffic to the mall, and this would help make Amazon, a retail disruptor, even more competitive.
Even before the pandemic, Amazon had already purchased the sites of some failed ones and reassigned them to distribution centers. The e-commerce giant continues to open new distribution centers to meet demand for delivery, and its antivirus coverage for warehouse workers has been under scrutiny.
J.C. Penney’s lenders extended a key deadline over the weekend as negotiations continue over the destination of the Plano, Texas-based retailer.
The deadline for lenders has been extended to Wednesday as of Monday, according to a paper filed Saturday at the U.S. Bankruptcy Court in Dallas. Penney’s lenders are deciding on a bidder for retail company Penney, who is expected to leave Chapter 11 later this year.
The relevant hearing was postponed until Wednesday. A successful bidder for the 118-year-old branch chain can be approved until the end of the month.
The concept that empty malls are perfectly suited to Amazon as distribution centers is not new. Amazon has purchased two shopping centers in Ohio for new distribution centers. And Amazon’s interest has been the subject of hypotheses about Penney’s bankruptcy.
Penney filed for bankruptcy with a plan to split the company in two. One company would continue to operate in Penney’s retail chain, and the other would be a genuine real estate investment accepted as true with Penney’s ownership, adding outlets and distribution centers.
In addition, Penney is in the process of promoting 142 store rentals where he now owns the final sales of stores. Penney also sells 24 outlets he owns, but he didn’t say if the outlets are final.
Although old grocery shopping malls no longer attract buyers, giant homes are at major intersections and where other people live in the suburbs and small towns.
Four retail establishments in Arkansas are among those that Penney announced its closure: in Batesville, Conway, El Dorado and Harrison.
The retail outlets of Macy’s, Nordstrom, Neiman Marcus and Penney’s have used their shopping centers as distribution centers in recent years and have accelerated the speed of this activity: the pandemic. More and more shoppers tried to pick up on the street for the first time when retail stores closed in March, April and May.
While Amazon has built distribution centers in Dallas-Fort Worth, it has also moved to neighborhoods with smaller delivery stations. To date, there are at least five in Dallas, Farmers Branch, Fort Worth and Garland. And the mall’s car parks are big enough to park many Amazon delivery trucks.
Delivery stations are a component of Amazon’s efforts to reach out to the customer. These buildings are the last impediment before an order is delivered. Packages are taken care of on routes until promised deadlines are met, according to Amazon’s website.
The information for this article was provided through Sebastian Tong and Yueqi Yang of Bloomberg News and Maria Halkias of The Dallas Morning News.