Amazon Plans Hundreds of Brick-and-Mortar Bookstores, Mall CEO Says

By Greg Bensinger 

After dipping its toes into brick-and-mortar retail last year by opening its first physical bookstore, Amazon.com Inc. could be diving into the deep end.

The Seattle company plans as many as 400 bookstores, Sandeep Mathrani, chief executive of large mall operator General Growth Properties Inc., said on an earnings call with analysts Tuesday.

"You've got Amazon opening brick-and-mortar bookstores and their goal is to open, as I understand, 300 to 400," said Mr. Mathrani in response to a question about mall traffic.

That compares to the 640 stores Barnes & Noble Inc. operates and the 255 locations Books-A-Million Inc. said it had as of last summer. Both companies spent years building out their retail operations. In addition to its one bookstore, Amazon already has a presence in Westfield Corp. malls, where it has set up permanent kiosks selling devices, cases and branded apparel.

It wasn't immediately clear how Mr. Mathrani got Amazon's figure, but he could have potentially spoken with Amazon's real-estate executives about their plans. A spokesman for Amazon declined to comment and a GGP spokesman had no immediate comment.

If Amazon were to open hundreds of stores, it would take years to scout locations and reach leasing deals, as well as hire staff. Physical stores would give Amazon customers a place to leaf through books before buying them.

Following the Amazon news, shares of Barnes & Noble Inc. slid 1.7% to $7.95 in after-hours trading.

Amazon opened a physical bookstore in Seattle in November, its first foray into brick-and-mortar retail. The store, in an outdoor mall, sells physical books and Amazon's devices. Amazon says it stocks the location using data it collects from its website. The store stocks about 5,000 titles at any one time, compared with millions on its namesake site.

Mr. Mathrani noted that other online retailers, like fashion site Bonobos and eyeglasses purveyor Warby Parker, are opening physical stores. Online makeup subscription service Birchbox "is cutting their overhead to open bricks-and-mortar stores," he said.

The executive put forth another possible motivation for Amazon to open a chain of physical stores: returns. He said 38% of online purchases for what are known as soft goods, such as clothing and paper products, are returned to brick-and-mortar locations.

Write to Greg Bensinger at [e-mail]

(END) Dow Jones Newswires

February 02, 2016 17:39 ET (22:39 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.