Please ensure Javascript is enabled for purposes of website accessibility

This Just In: Amazon, Inc.'s Brick-and-Mortar Ambitions Go Beyond Bookstores

By Daniel Sparks - Feb 5, 2016 at 7:25PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Sure, it may not have immediate plans to roll out 300 to 400 book stores; but the possibility of Amazon bringing a new experience to brick-and-mortar retail shouldn't be underestimated.

As it turns out, speculation that gained traction earlier this month that Amazon (AMZN 1.42%) had plans to roll out 300 to 400 bookstores probably isn't true. So Barnes & Noble (BKS) can take a deep breath -- for now. But while the e-commerce giant may not have any immediate plans to challenge the nation's largest bookstore retailer, the company does have broad ambitions for a new overall retail experience that could materialize at some point in the future, according to a report from Re/code.

Amazon bookstore in Seattle. Image source: Amazon.

First, here's an update on the bookstore speculation.

Bookstore speculation gets shut down
Speculation about Amazon's purported plans for 300 to 400 bookstores surfaced when the Wall Street Journal cited a comment from General Growth Properties CEO Sandeep Mathrani during a February 2nd earnings call. Mathrani said that, as he understood it, Amazon planned to roll out 300 to 400 bookstores.

Considering that he is the CEO of a $25 billion real estate investment trust that owns, manages, leases, and redevelops regional malls, there seemed to be some credibility to his speculation. The rumor also appeared somewhat believable considering Amazon had already opened a full-fledged bookstore in Seattle.

But Mathrani quickly retracted his remarks in a statement released by the company the next day.

Looking beyond bookstores
While Amazon may not have immediate plans to roll out 300 to 400 bookstores, brick-and-mortar retail is still something Amazon is thinking about, according to Re/code's Jason Del Rey.

"Amazon will indeed open up more bookstores, but it also plans to eventually unveil other types of retail stores in addition to bookstores, according to two sources familiar with the plans," Del Rey explained.

It's not yet clear what those stores will sell, or how they will be formatted, but the retail team's mission is to reimagine what shopping in a physical store would be like if you merged the best of physical retail with the best of Amazon.

Meanwhile, Del Rey noted the company does have plans to open another bookstore in Southern California. While the store hasn't been announced yet, Del Rey cited a job listing for an Amazon Books assistant store manager in La Jolla or San Diego.

Amazon bookstore. Image source: Amazon.

Whether Amazon could, at some point, launch as many as 300 to 400 bookstores, Del Rey's sources "could not rule out the eventual outcome," Del Rey said.

While investors should still file all of this talk of the company's brick-and-mortar plans as speculation, it shouldn't be surprising that Amazon is mulling over the idea of innovating in brick-and-mortar at some point. Amazon is known for extending its reach to increasingly more spaces. Once just an e-commerce website for books, the company now sells all sorts of merchandise on its website.

Further, it has also established itself as a leader in cloud servers, launched its own Amazon-branded hardware, and is now building a fleet of planes, trucks, and ships to help deliver product during peak times. It would be easy to fit a brick-and-mortar retail experience into the company's broadening ambitions.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$108.92 (1.42%) $1.52
Barnes & Noble, Inc. Stock Quote
Barnes & Noble, Inc.
BKS

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
319%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.