The retail outlet will be used to showcase Amazon’s range of consumer electronic devices, books and accessories. The shop is believed to be opening its doors in the lead up to the busy Christmas season where the company will undoubtedly be pushing to sell its recently-launched Kindle Fire tablet.
Analysts believe that Amazon is testing the waters to see whether a widespread physical retail venture could be profitable.
"The primary goal of the test is to determine if a physical retail presence can accelerate sales of Kindle devices and follow-on consumption of digital content at an attractive return on invested capital," wrote Cowen & Co. analyst Jim Friedland in a note to investors this week.
Amazon reported a 57 percent drop in profits in the fourth quarter, largely blaming soaring costs, investment in new sales centres and losses incurred each time it sells a Kindle Fire device. Analysts also believe that online sales on its website aren’t as strong as the growth of overall Internet sales, which are reported to be increasing by 10 percent on a yearly basis.
Following a worse-than-expected financial report, Amazon’s shares fell by 8.8 percent last week.
