Report: Amazon sizing up brick-and-mortar stores

Amazon, long a leader in online retail sales, may soon enter the brick-and-mortar retail business. Just don’t expect to see anywhere near the selection in those physical stores that you’d find online.

The e-tail gaint is considering a bid for some of RadioShack’s stores if and when the struggling electronics chain files for bankruptcy, Bloomberg reported, citing two anonymous sources “with knowledge of the matter.” Amazon could direct online customers to the stores to pick up their orders or it could use them to highlight and display some of its Kindle and Fire electronics products, one of those sources said.

Amazon’s deliberations come amid RadioShack’s ongoing struggles. The retailer, which is widely expected to file for bankruptcy in the near future, has posted mounting losses and reported in December that its cash on hand had dropped to just $43 million. On Monday, the New York Stock Exchange suspended trading in RadioShack’s stock; the exchange had previously warned the company that it had fallen afoul of listing rules that require companies to have a market capitalization or stockholder’s equity of at least $50 million.

The online retailer isn’t the only company circling around RadioShack. Sprint has reportedly been discussing a deal with the electronic chain in which it would purchase half of the company’s store leases as part of RadioShack’s bankruptcy filing.

Amazon’s interest in acquiring RadioShack’s locations would mark a significant change for the e-tailer. The Seattle company has famously eschewed brick-and-mortar stores since its founding 19 years ago. The lack of retail locations allowed Amazon to avoid collecting sales taxes in many states and helped it to reduce the costs of operating its business.

But the company’s calculations may be changing. Under pressure from state governments and local retailers, the company has agreed in recent years to collect sales tax in a growing number of states, including in California. The company has been experimenting with same-day delivery services that might be helped by having locations that are nearer to its customers.

Meanwhile, Amazon may see retail stores as a way to shore up its own shaky electronics business. The company took a $170 million charge last year related to unsold Fire phones. And a recent report indicated that sales of its Fire tablets have plummeted.



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