Amazon looking at turning Sears, J.C. Penney stores into fulfillment centers

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.

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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.

But for Simon, any deal to surrender prime space to Amazon would signal a break from a longtime business model for malls: reliance on a large department store to draw foot traffic to neighboring shops and restaurants.

That model has broken down in recent years, as many department stores are now fighting for their lives. Lord & Taylor also filed for bankruptcy early this month, while Neiman Marcus Group Ltd. filed in May. Nordstrom Inc. closed 16 stores in recent months.

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