Shlomo Chopp | Source | Founder and CEO at Anchor Shops by ShopFulfill

Retail-to-industrial conversions aren’t anything new, says Shlomo Chopp, founder and CEO of New York City-based clicks-and-bricks hybrid ShopFulfill Corp. and managing partner of New York City-based investment management firm Case Equity Partners LLC. But now that retailers largely welcome e-commerce as a “panacea” for their industry, some are taking a “reactionary” jump into establishing fulfillment operations under the mistaken notion that pure-play e-commerce succeeds, he notes.

As for retail landlords, they’re “missing the point” when it comes to fulfillment, Chopp says. He calls it a “fool’s errand” for landlords to hand over traditional space to tenants for e-commerce-supported logistics operations—a situation that he sees as aggressive in the best case and an overreaction in the worst case. But he acknowledges that “99 percent of the world doesn’t see it the way I see it.”

“I don’t buy this whole convert-to-fulfillment-center angle. It doesn’t make sense,” Chopp says.

“If you increase the value of the property, you have the right to take cash out, but we also live in a capitalist society. If you want the upside, you need to take the downside too.”

Why give up on stocking stores when legacy retailers find the majority of their profits there?