Is Amazon planning '300-400' more bookstores?

Elizabeth Weise

USA TODAY

Customers can try out Amazon products, like reading magazines on their Fire tablet, at the new Amazon Books store at University Village in Seattle, Washington on November 3, 2015. Twenty years after pioneering the virtual bookstore, Amazon went brick-and-mortar. The online giant, which led the bookselling industry's shift to the Internet, opened its first physical bookstore in its hometown of Seattle, Washington.

SAN FRANCISCO – A seemingly off-the-cuff comment from the CEO of a large mall operator about Amazon potentially opening 400 bookstores drew a lot of attention Tuesday.

Sandeep Mathrani, CEO of General Growth Properties Inc., was asked on an earnings call about mall traffic over the holiday season.

He answered that traffic was up and attributed some of the increase to the number of items consumers buy online and then return to brick-and-mortar stores.

Then he added, "and this case in point, you've got Amazon opening bricks and mortar bookstores and their goal is to open as I understand 300 to 400 bookstores."

Mathrani went on to list several online stores that have recently begun to open physical stores as well.

Online retailers getting physical

That one sentence set off a flurry of speculation online, with more than 90 stories and blog posts appearing within hours of the call.

Amazon opened its first and so far only brick and mortar store, a bookstore, in November. Called Amazon Books, the store is in Seattle's University Village, an upscale outdoor mall north of the University of Washington that's already home to thriving Apple and Microsoft stores.

If the Seattle online retailer were to open 400 bookstores, it would immediately become the second-largest retail bookseller in the United States. Only Barnes & Noble, which currently has 640 bookstores in 50 states, would be larger.

Asked to clarify what led Mathrani to make his statement, General Growth's vice president for investor relations Kevin Berry said there was no further comment beyond what was said on the call.

Amazon answered requests for more information with its standard, "We don’t comment on rumors and speculation."

Forrester Research analyst Sucharita Mulpuru said she was skeptical. "It doesn't sound like something they need to do or would even benefit from at this time."

Amazon opens a physical bookstore, but still hopes you buy online

Others could see a possible upside for the currently online retailer.

Having physical stores would give Amazon a way to offer free returns, said Kevon Hills, vice president of research for StellaService, a customer service analytics company.

"Today Amazon can process refunds within a day or two, but cannot compete with retailers who offer ‘free return shipping’ by allowing shoppers to drop off a return at your neighborhood store,” he said.

"We've seen 'buy online, return in store' (BORIS) become an area of focus for retailers with physical stores, as it has been an advantage over Amazon," Hills said.

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