This commentary was originally sent to Growth Seeker subscribers at 09:05 on Feb.3.
Thanks to a comment made on an earnings conference call last night, there is renewed speculation that Amazon.com (AMZN) will expand its bricks-and-mortar presence beyond a handful of stores in Seattle and New York.
Last night on the company's earnings conference call, the CEO of General Growth Properties (GGP), a real estate investment trust (REIT) that is engaged with more than 125 retail properties including malls, said, "You've got Amazon opening brick-and-mortar bookstores and their goal is to open, as I understand, 300 to 400 bookstores."
This comment, of course, made headlines and has many speculating whether Amazon will indeed follow in the footsteps of Action Alerts PLUS charity portfolio Apple (AAPL) and to a lesser extent Microsoft (MSFT) and expand its bricks-and-mortar presence.
As expected, Amazon has not commented on the GGP comments, but we can see the benefits of the company growing its retail footprint over time serving as a showcase for Amazon's existing line of connected products (tablets, TV sticks, the Alexa-powered Echo) and any new ones. Amazon could also use the store as a hub as it looks to expand Prime Now, part of the company's Prime service that offers a limited catalogue of goods available for one-hour or two-hour delivery.
The bottom line on this is we would not read too much into the comments from General Growth Properties, and we certainly don't expect Amazon to go full throttle into bricks-and-mortar locations, attacking the very retail business model it is putting under pressure as consumers embrace online and mobile commerce.
To date, Amazon has been deliberate in expanding its Prime service and when combined with the company's renewed focus on profitable growth, we suspect any bricks-and-mortar expansion by Amazon would be a measured one.