Amazon is reportedly planning to open department stores, its latest experiment in physical retail


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Amazon is planning to open large retail locations that resemble department stores, according to a Wall Street Journal report.

The newspaper, citing people familiar with the plans, reported that some of the first Amazon department stores are expected to be in California and Ohio. The locations will take up roughly 30,000 square feet, around the size of a Kohl’s or T.J. Maxx location, but still about the third of a size of a traditional department store.

The move would mark Amazon’s latest experiment with physical retail stores after stealing market share in the retail landscape from incumbents with its e-commerce business. The company recently overtook Walmart as the world’s largest retail seller outside of China.

In recent years, the company bought Whole Foods Market and has opened brick-and-mortar book stores, Amazon-branded grocery stores and cashierless convenience stores. Physical locations come with higher fixed costs but can attract more eyeballs and allow consumers to try on clothes.

The department stores are expected to help Amazon sell more clothing and technology products, according to the Journal. The newspaper reported the company first started approaching U.S. apparel brands about large-scale stores approximately two years ago, although it’s unclear at this point which brands the locations would stock. The e-commerce giant also plans to sell its own private label goods.

Amazon’s entry into department stores would put even more pressure on an already struggling retail segment. J.C. Penney, Lord & Taylor and Neiman Marcus were among the retailers that filed for bankruptcy last year. Nordstrom and Macy’s have been investing heavily in an effort to attract new customers, including opening smaller format stores and improving their e-commerce businesses.

Amazon did not immediately respond to a request for comment from CNBC.

Shares of the company have fallen more than 1% this year, giving it a market value of $1.59 trillion.

Read more about Amazon’s plans here.

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