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While Amazon (NASDAQ: AMZN) has used deserted shopping malls in the afterlife as places to build new distribution centers, Simon Property Group (NYSE: SPG) needs the e-commerce giant to use bankrupt retail outlets in its malls to respond to online orders.
The Wall Street Journal reports that the mall operator has been in negotiations with Amazon on the use of J.C. Penney outlets (OTC: JCPN). Q) and Sears (NASDAQ: SHLD) at Simon Malls. Simon Malls have lately 63 Penney retail outlets and 11 Sears retail outlets.
For a while, malls may not have disrupted their landmark outlets to break and leave their location, as retail locations paid below-market rentals and mall operators can also simply lease the area to smaller stores at particularly high prices.
Seritage Growth Proconsistent withties (NYSE: SRG) did so with Sears before it went bankrupt. He was able to convert the $4 per square foot that the store had paid on average to $12 per square foot and, in some cases, about $20.
But shopping at malls is declining now that visitor traffic is declining, so Simon Property Group has bought stores like Aeropostale, Brooks Brothers and Forever 21, all of which have been declared bankrupt, to make sure their outlets are not vacant. and don’t drive. more consumers away.
However, the department’s retail outlets are giant areas to occupy about 100,000 square feet or more, and although Simon probably deserves to lower the rent since the price of the warehouse area is less than $10, consistent with the square foot, this would be greater than a giant vacancy.
The Wall Street Journal says Amazon has also been talking to mall owners about putting its new grocery stores into empty JCPenney stores.