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Abandoned mall department stores may become Amazon’s next fulfillment centers

One of the largest owners of shopping mall real estate in the United Stages, Simon Property Group, has been talking to Amazon about transforming its anchor department stores into Amazon distribution hubs, according to the Wall Street Journal.

In the case of Simon Property, the anchor tenants like J.C. Penney and Sears that used to be stable sources of revenue are now weights around the neck of the retail real estate manager, and transforming their ghostly halls of pale mannequins into warehouses for Amazon orders simply makes sense.

The transformation from showroom to storehouse for everything from books and sweaters to kitchenware and electronics won’t be too much of a stretch for the vacant storefronts of businesses that hvae both filed for Chapter 11 bankruptcy protection.

Simon’s holdings include some 63 JC Penney and 11 Sears stores, according to the Journal’s reporting citing a May public filing from the real estate developer.

This wouldn’t be the first time that Amazon had turned to mall real estate for fulfillment centers. in 2019, the online retailer acquired a massive physical footprint in Akron, Ohio that it turned into a distribution center.

Gone are the days when gum smacking tweens and teens and their beleaguered parents would head to the local mall for a stroll around the retail block. Now shoppers prefer to peruse online and kids find Fortnite to be the Hot Topic to hang in. 

The deal, if it goes through, would be another nail in the coffin for a staple of late twentieth century culture that now mostly exists in the memory of baby boomers and Gen X consumers (thanks millennials and Gen Z).

Malls these days are lifestyle affairs that promise boutique branded shops than the sprawling department stores that had something for everyone. The big-box spaces that the Journal reported Amazon is negotiating for are the 100,000 square foot, multi-story behemoths, that are likely not long for the long tail world of niche commerce anyway.

These days, consumers are looking for brands that appeal to a persona or the bottom line of a pocketbook, and not the mass casual one-stop-shop of late twentieth century department store off-the-rack identities.

The Journal reported that, if the deals went through, Simon would like rent the space at a considerable discount to what it would charge another retailer. The paper estimated that rents could be as low as $4 per square foot to $19 per square foot, while warehouse rents average about $10.

At this point, shopping malls are looking for anything to bring in money. They’ve already tried schools, medical offices and senior living facilities, but the COVID-19 epidemic has thrown all of those plans into the abyss.

And, as the Journal notes, malls are already located in places that make them attractive distribution hubs. Amazon has bought some sites already and FedEx and DHL have done the same, according to the paper.

At this point, Amazon ownership may be a better fate for the real estate than totally abandoning it to empty space and the lingering soundtrack of 80s rock.

 

TikTok donates $3 million to Arnold Schwarzenegger’s charity feeding kids affected by school closures

The social media giant TikTok said that it would donate $3 million to AfterSchool All-Stars, a charity founded by actor and former California Governor Arnold Schwarzenegger, to feed families whose food security was affected by the close of public schools in response to the COVID-19 outbreak.

TikTok said in a statement Thursday that families in 60 cities with After-School All-Stars chapters would receive food vouchers and gift cards that can be spent on food and other essentials through local grocery stores.

“We are all operating in uncertain times, and it’s more important now than ever before for both our local and global communities to come together to help those in need,” said Vanessa Pappas, General Manager of TikTok U.S., in a statement. “This pledge to ASAS will help more students get access to meals, safely provided to them, during this crisis. While this alone won’t mitigate the impact of the current situation, we hope it can relieve one worry for parents who are balancing social distancing mandates, work and caring for children who can no longer go to school each day.”

Chapters in cities that have been hardest hit by the epidemic will receive the aid, including Los Angeles, Miami, New York, Newark, San Francisco, Seattle and Washington. Corporate partners in the initiative include Food Land, Giant, Kroger, Publix, Ralphs, Safeway, Target and Walmart .

TikTok, which is owned by the Chinese media company Bytedance, also said it would match up to $1 million in employee donations to the ASAS to boost the organization’s ability to provide food.

“During a crisis, improvisation is critical and everyone has to look at new ways to help the most vulnerable,” said Arnold Schwarzenegger, former California Governor and Founder of After-School All-Stars, in a statement. “The After-School All-Stars programs are paused with schools closed, but we remain committed to supporting the 100,000 families we work with year-round. When I founded After-School All-Stars in 1992, the goal was always to support the families who need it the most. I’m grateful to TikTok for their donation which allows us to shift our priorities so our team can safely deliver groceries and gift cards for groceries to the families we help.”

 

Start thinking like a startup

man with a light bulb over his head Shifts in a rapidly changing retail world and dramatic changes in consumer behavior continue to be a challenge for some traditional retailers. Legacy retailers that have remained stagnant with their old-guard ways are struggling to maintain sales and stay relevant with today’s consumer. The successful brands all have one thing in common: They don’t fear change. Read More

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