Amazon Is Mum About Reports Of Its Bricks-And-Mortar Ambitions

If you thought that bricks-and-mortar bookstore Amazon opened in Seattle’s University Village mall last November was just an experiment to see how the other half used to live, ponder anew. The online retailer is said to have plans to expand into other malls, with one estimate of the number of storefronts running as high as 400 but other reports saying the plans are more “modest.” At best.

As it so often does on reports of this nature, Amazon had no comment, at least officially. But here are two updates woven into a story Matt Novak posted about the rumors on Gizmodo:

Update 6:25pm EST: Anonymous Amazon sources are somewhat angry about the reports, which come from a non-Amazon CEO, and are calling the entire story (this one included) ‘misleading.’ Gizmodo has repeatedly asked for on-the-record denials from multiple sources within Amazon and been denied.

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“Update 6:43pm EST: Anonymous Amazon sources are particularly angry about my last update.”

The tale begins with an earnings call for Chicago-based, national mall operator General Growth Properties (GGP) yesterday during which CEO Sandeep Mathrani was asked about traffic prospects by Barclays’ analyst Linda Tsai.

“You’ve got Amazon opening brick-and-mortar bookstores and their goal is to open, as I understand, 300 to 400,” Mathrani responded. Alas, Tsai's follow-up question was about the company’s $20 million reserve for store closings, no one else jumped in and the call came to a close with the customary niceties.

The Wall Street Journal’s Greg Bensinger was the first to report on the statement, writing that “it wasn’t clear where Mr. Mathrani got Amazon’s store figure, but he could have spoken with Amazon’s real-estate executives about their plans.”

Other news outlets, including CNBC, quickly spread the news, even as it hit the twittersphere.

The New York Times Nick Wingfield writes that “a person briefed on the matter who spoke on the condition of anonymity to discuss confidential plans” pooh-poohed that figure.

“The company’s plans for physical stores are modest, this person said, especially in comparison with reports of an expansion suggested by an unusual source, the chief of a large shopping mall operator,” Wingfield reports.

In any event, the seeming off-the-cuff remark not only generated a lot of bytes and printer’s ink, it also saw Barnes & Noble’s market value seeing red. Its shares tumbled 5.38% by close as news of the rumor got around.

Wingfield does point out that “Jennifer Cast, an early Amazon executive and trusted lieutenant of Mr. Bezos, returned to the company to help oversee the store initiative after leaving Amazon more than a dozen years ago.”

Indeed, “shopping at Amazon Books isn’t like browsing for books in a typical Barnes & Nobles,” writes Leena Rao for Fortune. “Amazon uses data from its e-commerce site such as customer ratings and sales to decide which books to stock. Amazon’s store also places books face out on the shelves rather than spine out, and includes each book’s Amazon.com rating and a customer review.”

It also includes the ability to “test drive Amazon’s devices in the store.” Oh, and buy them.

Speaking of those devices, “Amazon has revealed a new firmware update that'll hit its Kindle e-readers later this month, and it sounds like the software will make it even easier to — you guessed it — buy books from Amazon,” Sam Byford reports for The Verge. “There's a revamped home screen with shortcuts for books on your wish list, downloaded samples, and reading lists from Goodreads, and the update will also provide quick toggles for features like airplane mode and cloud syncing.”

CNET’s Carrie Mihalcik and Ben Fox Rubin are somewhat skeptical about any large-scale expansion by Amazon into bricks-and-mortar, writing that “building out a chain of bookstores would be an unexpected move.” First, online sales are booming for the e-tailer — “the ‘e’ stands for ‘enormous.’” Second, “fewer people are venturing out to the malls, in part because Amazon is so easy, convenient and cheap.”

Just before his Amazon bombshell, we should note, GGP CEO Mathrani was arguing that although “the consumer is doing the research on their mobile device,” almost 95% of all soft goods are bought in stores. And, he claimed, “I think its 38% of eCommerce purchases of soft goods that are bought online are returned in the bricks and mortar store.”

Justifying how well you’re doing on the basis of the other guy’s not-quite-up-to-speed metrics, however, is a sure sign that the game’s momentum is headed in the opposite direction.

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