Amazon May Take Over old JCPenneys and Sears at Struggling Malls, in Order to Speed up Deliveries: Report

Retail spaces at struggling malls, formerly occupied by closed or bankrupt department stores, may not be empty or unprofitable for long: Amazon may move in.

The company is in talks with the largest mall owner in the United States, Simon Property Group, to convert former or current JCPenney and Sears stores into distribution hubs to deliver packages, according to The Wall Street Journal.

Both retail chains are closing hundred of stores and have filed for bankruptcy, the report said, although Sears has since emerged from Chapter 11. According to its most recent public filing, Simon malls have 63 JCPenney and 11 Sears stores, the report said.

“The deal could make sense for both Amazon and Simon as the e-commerce landscape shifts and many traditional brick-and-mortar stores are in collapse,” the report said.

Amazon wants space closer to where customers live, the report said. As malls are typically located closer to highways and residential areas, as opposed to mammoth warehouses, the move would allow Amazon to speed up shipping times to customers, as it builds out its one-day delivery strategy.

Amazon warehouses won’t be attracting much foot traffic - but they will help to pay the bills - and mall owners need cash-rich tenants to replace their bankrupt anchor stores, the report said.

“It is a win-win for both sides,” said Chris Walton, a former Target executive and now CEO of the retail blog Omni Talk. “Simon gets an anchor tenant and Amazon gets a more localized fulfillment center. For Amazon, the deal would also give it “a front row seat into developing the mall infrastructure for the future,” the report cited Walton.

The Wall Street Journal reported the number of stores under consideration for Amazon is unclear, “and it is possible that the two sides may fail to reach an agreement,” citing people briefed on the matter.

Amazon declined to comment, and Simon did not respond to a request for comment.