Amazon and Mall Operator Look at Turning Sears, J.C. Penney Stores Into Fulfillment Centers (wsj.com) 92
The largest mall owner in the U.S. has been in talks with Amazon.com, the company many retailers denounce as the mall industry's biggest disrupter, to take over space left by ailing department stores. From a report: Simon Property Group has been exploring with Amazon the possibility of turning some of the property owner's anchor department stores into Amazon distribution hubs, according to people familiar with the matter. Amazon typically uses these warehouses to store everything from books and sweaters to kitchenware and electronics until delivery to local customers. The talks have focused on converting stores formerly or currently occupied by J.C. Penney and Sears, these people said. The department-store chains have both filed for chapter 11 bankruptcy protection and as part of their plans have been closing dozens of stores across the country. Simon malls have 63 Penney and 11 Sears stores, according to its most recent public filing in May.
It wasn't clear how many stores are under consideration for Amazon, and it is possible that the two sides could fail to reach an agreement, people briefed on the matter said. 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. Malls were struggling for years, as more customers stayed home to shop online. The spread of the coronavirus, which forced malls to temporarily close and limited their crowds even after reopening, has worsened the situation. Amazon, meanwhile, was able to navigate new logistical challenges during Covid-19 and recently reported its greatest quarter ever. For Amazon, a deal with Simon would be consistent with its efforts to add more distribution hubs near residential areas to speed up the crucial last mile of delivery.
It wasn't clear how many stores are under consideration for Amazon, and it is possible that the two sides could fail to reach an agreement, people briefed on the matter said. 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. Malls were struggling for years, as more customers stayed home to shop online. The spread of the coronavirus, which forced malls to temporarily close and limited their crowds even after reopening, has worsened the situation. Amazon, meanwhile, was able to navigate new logistical challenges during Covid-19 and recently reported its greatest quarter ever. For Amazon, a deal with Simon would be consistent with its efforts to add more distribution hubs near residential areas to speed up the crucial last mile of delivery.
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The rest of the world is seeing cases pop up again when they relax restrictions. Nothing has fucking changed, all they have done is prevented exposures up to now. Its not like all those people that sheltered in place magically got immunity.
Unless they are going to continue aggressive travel restrictions indefinitely. The reality is US muddle thru strategy WILL ultimately mean we have high percentages of the population that are immune while the rest of the world is having outbreak after outbreak. That is u
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We'll also have a higher percentage of dead and disabled citizens. We already have 501 dead per million people, the world average is 94, and per capita we're number 8 worldwide and rapidly catching up to Sweden and Italy.
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Don't worry, the rest of the country won't ever catch up in death toll with those idiotic north-eastern Democratic governors who sent COVID-positive patients into nursing homes. New cases and death rates for the country as a whole have already peaked, although there are still some states catching up because they delayed local cases.
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...The reality is US muddle thru strategy WILL ultimately mean we have high percentages of the population that are immune while the rest of the world is having outbreak after outbreak...
I thought there wasn't really evidence that once you get it you're immune or at best it's only for a few months.
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So far, unless you have an autoimmune disease as well, you're immune.
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Now if you could give the power to one party at all levels and
are they setup for high truck use? (Score:3)
are they setup for high truck use?
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Around here, retail space rent is $$/sq foot plus a percentage of gross revenue. I have doubts that Amazon will agree to that.
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Around here, retail space rent is $$/sq foot plus a percentage of gross revenue. I have doubts that Amazon will agree to that.
Although Sears generally owns their space - even space attached to malls - so if Amazon doesn't like the lease offered by the mall for a JCPenny space they could talk to Sears about purchasing their space instead.
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That's generally only true of some of the older Sears locations, mostly those built before the mid 1980s, and mostly stand-alone stores not connected to malls.
I could be wrong, but I worked on dozens of Sears stores in the 80s and 90s and new construction was mostly build-to-suit, lease-back arra
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Sears engaged in a massive program of sale-and-leaseback of their stores in order to stay afloat (or perhaps stave off the inevitable bankruptcy). At the time of Sears' bankruptcy, al lot of the stores were owned by a hedge fund that was controlled by Sears' CEO.
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Although Sears generally owns their space - even space attached to malls
Sears engaged in a massive program of sale-and-leaseback of their stores in order to stay afloat (or perhaps stave off the inevitable bankruptcy). At the time of Sears' bankruptcy, al lot of the stores were owned by a hedge fund that was controlled by Sears' CEO.
Not that long ago we would have called that what it is - a shell game. Regardless, the space does not belong to the malls themselves, and it is not for the malls to lease out.
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Yeah... that was my first thought as well— it is like the people have never seen a distribution center. While I am sure you could retrofit the space with additional loading bays (with a lot of work), you would need to completely re-work parking and drive lanes across the entire mall. Most of the smaller logistics centers I have seen are designed for something along the lines of 60-100 semi-trailers per hour. Even if these are at half the size, that is a lot of semis moving around... before you get
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This is the question to ask. Malls, the outparcels, the road infrastructure, and the communities around them aren't set up up to work efficiently as warehouses. Adapting them will be non-trivial.
On the plus side it's >100,000 square feet of mostly open space. On the down side that space isn't designed for high mass loading. The second (and sometimes third) floors are usually serviced with one freight elevator. They have one or two loading docks serviced by tiny access roads designed specifically to
Malls were NEVER profitable (Score:5, Interesting)
Except in rare circumstances Malls are/were unprofitable financially, but beneficial for tax purposes.
Almost all Malls are/were Real Estate Trusts. Basically you bought large tracts of land and rented it out. They were done for tax purposes (Real Estate profits are treated differently than other profits).
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Simon Property group made $1.4 Billion in profits last year. REITs are done for the profits, they're structured as REITs because that has tax benefits, but they don't build malls for the tax benefits, they build them for the profits and don't need to give as much of the profits up to the government because of the tax benefits.
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You are mixing tax-advantaged profits with not profitable. As long as they are above 80% occupancy, most malls are doing fine. The only problem is when the anchor stores leave and there is nobody to backfill the space.
Strip-malls can be in a different category, but most shopping malls have over a 10% cap rate.
All the abandoned K-Marts would work better (Score:5, Insightful)
They're mostly stand alone, with a large parking lot.
Now if Amazon would use some of the space to set up a box service so you could go retrieve your goodies without having to worry about the porch thieves...
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Not necessarily. In that case you are dealing with individual landlords since the stores are standalone and often not owned by the corporation. Also, it has been so long since KMart went under (for the most part) their locations have been repurposed. All of the ones I can think of around here were converted years ago.
The idea of Amazon is to negotiate with one entity (Simon) and gain access to a large number of sites all in one fell swoop.
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I also recall that at one point, there was a Sears within 5 miles of the majority of the US population. I remember thinking at the time, when the Amazon drone delivery thing was starting up and Sears was failing, that those locations would be great for Amazon to snap up. While there are standalone stores, a lot of Sears were anchor stores in malls....
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Now that every other door has a Ring or Nest attached to it are porch pirates still a thing?
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Even with the cameras it's a pretty low risk crime.
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That's because packages tend to be low value. The police aren't going to get involved until it rises to the level of felony, since prosecutors won't bother with misdemeanor theft. Not many packages are worth over $1000 (minimum to qualify for felony theft in most states), and each crime is considered separately. Five $999 thefts are not equal to one felony.
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So it requires a parking nightmare and a day off work from a victim to get anywhere with the crime.
The guy hit three porches on my block, refused a plea, and not one of the people hit showed up.
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Or they could, you know, use the large retail spaces for . . . retail stores.
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I find all this a bit ironic especially from champions of online, calling brick and mortar dinosaurs for not embracing progress. Seems the new kids on the block could still learn a thing or two from grandpa retail.
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This is how all stores worked before 1880.
There was a counter at the front of the store. You handed your list to a clerk who then went into the storeroom and fetched your items.
The first store to allow customers into the merchandise area was Woolworths in 1879, which was a revolutionary change in retailing.
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And the last store to work on that model that I'm aware of was Montgomery Ward's, which was the original catalog retailer. Too bad for them they didn't manage to survive into the internet era, they could have rebuilt their business around that.
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Lots of smaller plumbing supply and auto parts places still do that, for reasons that are obvious if you've ever tried to make sense of the mis-shelved items at a Lowe's store to find the item that their website says has ten units in stock, with exactly zero in the correct bin. :-)
All the abandoned catalog stores would work better (Score:5, Informative)
I'm reminded of Service Merchandise and their onsite catalogs.
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IIRC, Amazon has very few warehouses that are non-fulfillment. A deca
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So you put in a bunch of kiosks with digital catalogs, same as online, and let customers pick their products. (It's not like they'd get to handle 'em first with an online purchase, so..) Then have the robot (or human, as the case may be) gather 'em up, put 'em in a basket, and send 'em to the checkout lane. Call your number, come and pay, and off you go with your goodies No shoplifting, and no need to wait for someone who wastes the clerk's time.
This is the way retail is headed anyway, what with the increas
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(actually I'd be surprised if this is still the case, I moved out of the UK in 1998, I'm guessing they have computers now?)
The catalogues, paper forms for writing stock numbers on and manual checkouts are still there (or at least were before the covid outbreak, haven't been in one since). In addition though there are also electronic kiosks where you could punch in the stock codes and pay by credit/debit card rather than queuing up at a manual checkout.
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They are using K-Marts!
At least they're using one in Milford, MA. They truck in tons of stuff every day, and the parking lot is full of delivery vans that deliver to the surrounding towns. It's almost ideal, as they have huge buildings that are designed to receive stuff from trucks, and large parking lots. They're situated on major roads for easy access.
In the Milford case, however, they're up against the town as they have exceeded the terms of their permits, and the traffic patterns they're generating a
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Now if Amazon would use some of the space to set up a box service so you could go retrieve your goodies without having to worry about the porch thieves...
There are three of those box services within walking distance of my apartment.
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K-Marts are also uniformly crappy buildings, cheaply constructed and LOOK cheap, that would need a huge amount of renovation, if not outright restoration just to be functional. Agreed they usually have good parking, but are sometimes in weird locations just beyond where anyone goes to shop.
Sears and Penneys are usually mall anchor stores (the standalones mostly went away when malls erupted), thus built to at least look decent, and were generally in better locations.
Still, it's a good thought, as it would c
Good Alternative to Amazon for CDs? (Score:2)
It appears Amazon no longer shows (or has hidden) track listings from their CD descriptions. No doubt, this was done to enhance the customer experience and I applaud their efforts to to make the experience more enjoyable for the majority of their customers. Unfortunately, I now find myself in that tiny minority of customers who actually want to know what the fuck they are buying. Does anyone know of a good internet alternative? Easy browsing, track listings, reasonable turnaround, human customer servic
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Discogs, It's not really a full fledged bookstore/amazon style market, more of an eBay style market focused on music specifically. That said it has "everything" and it's cataloged meticulously. I have never had an issue buying from there either so can't say how the customer service system operates.
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Thanks for the recommendation! I took a quick look and t'll probably give them a try.
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If i want just the "normal" album I usually just look at which are the cheapest and most available, chances are that's what you'll find. You can compare track lists (and everything pretty much has an accurate track list on there) if you are worried about a missing song. Most variants are just reissues so unless you want a specific release it doesn't really matter but a little comparison and research you can find what you are looking for. It's a little intimidating at first compared to say Amazon but I ha
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I agree wholeheartedly, Dogdude. Unfortunately, the nearest shop that meets that criteria is 50 miles away and in a state that is not requiring face mask usage. Thus the search for online options.
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Kiosk out front to do some quick shopping (Score:1)
It would be kinda nice if they kept a small storefront with a kiosk and they would just run back and grab whatever we wanted to buy that they actually have in stock at that time.
This is classic monopolist behavior (Score:2)
Undercut the competition, buy 'em out. The next step is "raise prices", assuming that anti-trust action doesn't come first.
Re:This is classic monopolist behavior (Score:5, Insightful)
I have a really hard time blaming Amazon for this. I'm sure I can't be the only one who, in the latter half of the 1990's, advised store owners of the painfully obvious approach of online shopping. Of the dozens of store owners I advised in just in my own local area, not one of them took the oncoming threat seriously. Most of them visibly scoffed when I told them that they were writing their own eulogy by ignoring online shopping.
Even today, you can find idiotic articles professing people's love of going to a store to shop. Brick and mortar stores are their own victims, not Amazon's.
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No need to call people with different opinions "idiots". I happen to prefer going to stores to shop, and I don't buy anything online, unless I absolutely have to.
As a result of people like you, most towns in the US are largely empty except for a Wal-Mart and some grocery stores. For shut-ins, I guess it doesn't matter. For those of us who like to go out into our community and talk to other humans, it reall
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Not all "shut-ins" are by choice. *said to the person advising others about "idiot"*
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The downtowns of most US towns were hollowed out long before Jeff Bezos started selling books online. Walmart, Target and Kroger killed small and medium retailers over a decade earlier.
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No need to call people with different opinions "idiots".
Read what I wrote. I didn't refer to the tiny segment of the population that likes to shop in stores as idiots. I referred to article writers who are pretending that those people represent anything other than a small, and shrinking, fraction of the population as idiots.
The trend has been obvious to me since the mid-1990's: brick and mortar shopping is going away (or, at best, becoming extremely rare). The whole point of my reply is that stores have had over twenty years to see the obvious and to adapt to it
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Actually, this feels more like a PR move to me. They might be getting pushback on getting new warehouses approved in certain areas, but "recycling" existing unused retail space is probably more palatable to urban zoning boards.
And, hey, when the entire mall goes bust due to lack of foot traffic thanks to COVID, they already have an existing client who might be interested in buying up the additional space.
Old is new (Score:3)
We were teenagers, and my prankster friend entered my name in the computer as a girl's name so that I'd have to report to the counter and claim the item that way. Jerk.
Don't blame Amazon for Sears' failure (Score:4, Interesting)
Fun side fact; the idiot running Sears into the ground was roommates with our current Treasury Secretary. No, that's not a joke.
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He's trying to run it into the ground, and he's set it up so he'll get paid off before any shareholders. In the process he's profited by selling off Sears' real estate, which was the primary competitive advantage that made their business viable. (The other one is their trucking fleet, which AFAIK they still have. They've repainted their trucks with some less-known name so that they can do deliveries for Costco without making people think the recipients are losers because a Sears truck is arriving at their d
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He just took a page from the playbook of KMart executives, who all got multi-million dollar "retention bonuses" to ensure they stayed and helped close shop on the company they had managed into the ground.
Negotiate for Sears? (Score:2)
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Sears mostly sold its real estate to ESL (Lamperts hedge-fund / holding company) and leased the stores back to raise capital.
SHLDQ (Old Sears) by the way is pretty well defunct other than a few lawsuits and tying up of lose ends. Transform Hold Co (Private and owned by ESL) is still operating most of the remaining stores.
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This was very true of Sears' old stores. But I worked on a lot of new Sears anchor stores attached to malls built during the 80s and 90s. As far as I recall, they were mostly lease-back arrangements, where Sears designed and built them, the mall reimbursed Sears for the construction cost, up to a point, and then Sears paid rent under a lease. I could be wrong, but Lambert has been steadily selling the real estate th
Dinosaurs... (Score:2)
What is truly ironic about this is that Sears and JC Penney were the original mail order houses. They had the knowledge, infrastructure and resources and somehow just missed what was a historic opportunity. There is a lesson here.
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There still needed to be a lot of development to go from "mail-order" to the current juggernaut.
Re:Dinosaurs... (Score:4, Insightful)
That lesson could be called "The MBA Disease", where kids come out of college with six figures of debt, a shiny new MBA, and no actual experience doing any real work, and get put in charge of running businesses about which they know nothing. As late as the 1980s most business leaders had still come up the ladder in a single industry, the CEO of Target Stores had started on the sales floor in the 1970s and had a pretty good idea what most of his underlings did, even Edsel Ford had to work on the assembly line for a year before Henry let him into management. Today there isn't a single person in the executive suites at Target who has ever worked the sales floor, and it's reflected in many of their decisions.
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it's the ultimate humiliation for these former bra (Score:1)
Where Will We Showroom Our Amazon Purchases? (Score:3)
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In the first sentence, you blame the failure of retail on the individuals shopping locally, and then buying at Amazon.
In the second sentence, you're blaming Amazon.
I'm a retailer. The fault of the collapse of retail is the individual consumers. Amazon would
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Seeing an item yourself isn't that useful for many things. You can't really tell if a vacuum cleaner cleans well just by looking at it in the shop. Better off reading some reviews and looking at the EU test label.
Even for clothes many use approximate sizes (SMLX) and most of the clothes retailers in the UK offer free returns now. Try on at home is becoming the new norm.
Physical retail needs to start sucking less to stay competitive.
How about 2 hour pickup? (Score:2)
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What's more likely is that you won't like going to the local Amazon fulfillment center and waiting to pick up your package much better. Not when you can get that new product delivered to your door the very same day.
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I don't agree.
One of the reasons I didn't go to the store is that I had no idea if they had what I wanted in stock. None of those retailers kept stock info on their web site, so I was very likely to drive over there and come away empty handed. In fact, I did sometimes use "ship to store for pickup" from both Sears and JC Penny prior to Amazon just because then I knew what I wanted would be there.
Also, while I can get some items same day if I order before a cut off the stores should allow Amazon to do bett
South Park Did It (Score:3)
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Double slap (Score:2)
good idea (Score:2)
Sears was the original catalog store (Score:5, Insightful)
Who ever was on the board of Sears for the 1990's and 2000's needs to grilled by the share holders for missing the online ordering bonanza. Sears should have been Amazon.
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In the 1970s the business administration course changed and they started teaching something called "Business Ethics" which insisted that management's only obligation was to maximize shareholder value. In the 1980s they changed executive reimbursement to massive stock options, and the job of the executive changed from managing the company's path to "providing leadership and inspiration". The sum total is that all objectives now are focused on the short term payoff that will temporarily bump up the stock pr
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You can get really explicit and name the individual. His name was Eddie Lampert and he was the death of Sears. He was directly responsible for the loss of hundreds of thousands of jobs through his incompetence.
https://www.businessinsider.co... [businessinsider.com]
https://www.businessinsider.co... [businessinsider.com]
People were writing articles warning about the guy since at least 2008
https://ritholtz.com/2008/01/e... [ritholtz.com]
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