Amazon Is Buying Dead Malls – and the Reason Why Is Fascinating

Escalator in shopping mall.
Marchcattle / Getty Images/iStockphoto

Amazon, which has done as much as any company to bring about the demise of shopping malls in the United States, has now come full circle by buying up struggling malls and turning them into distribution centers for its rapidly growing e-commerce empire.

See: 39 Dead (or Dying) American MallsFind: Macy’s to Close 37 Stores as the Retail Apocalypse Continues in 2021

NBC News on Tuesday reported that over the last several months, Amazon has gone on a shopping spree with a number of new mall purchases. Last month the Seattle-based retail giant won approval to convert a mall in Baton Rouge, Louisiana, into a 3.4 million-square-foot distribution center. That same month, Amazon won similar approval to turn a mall in Knoxville, Tennessee, into a 220,000-square-foot distribution center.

Those deals followed a December decision by the local planning board in Worcester, Massachusetts, to let Amazon convert the city’s Greendale Mall into a 121,000-square-foot distribution center.

An analysis by Coresight Research found that between 2016 and 2019, Amazon converted about 25 shopping malls into distribution facilities. That pace should quicken amid a bricks-and-mortar retail environment that has not only been hammered by the continued rise of online shopping, but been nearly decimated by the COVID-19 pandemic. This has left owners of shopping malls looking for ways to monetize assets that are failing at an alarming rate.

See: Iconic US Businesses That Filed for BankruptcyFind: Stores You Love That May Soon Be Gone Forever

The Wall Street Journal reported last summer that Simon Property Group, the nation’s biggest mall owner, was in talks with Amazon to turn Simon’s anchor department stores into Amazon distribution centers. Those talks reportedly focused on converting stores formerly or currently occupied by J.C. Penney and Sears Holdings, both of which have filed for Chapter 11 bankruptcy protection and announced plans to close dozens of stores across the country.

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Last updated: April 7, 2021


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