From DJ Newswire, but I'd swear it was from the Onion
Sears to Market Stores as Data, Disaster Recovery Centers
Last update: 5/29/2013 3:54:33 PM
By Karen Talley
Sears Holdings Corp. (SHLD) believes it has finally found uses for its underused cavernous stores: data storage warehouses, disaster relief centers and even cell phone towers.
The initiatives partially answer a question that analysts and investors have long been asking--what will Sears do with all the space it has amassed.
Sears, under its namesake and Kmart banners, has roughly 2,000 open stores in the U.S. that encompass over 250 million square feet. Between 2010 and last year the company closed 333 U.S. locations, according to its annual report. The company does not disclose how many of the empty stores remain in its portfolio. A Sears store averages 136,000 square feet while a Kmart averages 94,000 square feet, with Kmart super centers averaging 168,000 square feet.
Finding uses for already closed stores, and those that will follow, has been a bane to the company, which is struggling with sluggish sales and posted a loss in its last quarter.
The initiative to find novel uses for the stores is taking place under Sears' new unit, Ubiquity Critical Environments, which is headed by the former head of Microsoft Corp.'s (MSFT) Chicago data center, Sean Farney.
Ubiquity stands for "the breadth of Sears Holdings' real estate operations and the range of opportunities it creates," Sears spokesman Howard Riefs told Dow Jones Newswires. "We recently established [the unit] to re-develop properties within our portfolio that are no longer in use as retail stores."
The Ubiquity unit was reported earlier by trade publication Data Center Knowledge.
The first Ubiquity initiative will involve a Sears store on Chicago's south side, near the Chicago Skyway. The 127,000 square foot store is slated to close at the end of this month and be transformed into a multiple-tenant data storage site.
The store sites have "e
There could be lots of money to be made if they bought out some smaller data transfer company and grew into the cloud business that is expected to grow leaps and bounds in the next few years. With lots of stores in a 10 mile radius of people this could work out. Rax, Inap, Akam, and many others come to mind
The store sites have "existing power, fiber and security conditions that meet the specific needs of data center, business continuity and communication operators," Mr. Riefs said.
Sears will mostly use Kmart sites as the data centers because most are not attached to malls and therefore afford users privacy. The sites have sufficient power and network communications to house computer servers and systems that process Internet traffic, he said.
Open mall-based Sears stores with underutilized floor space will be used for business continuity services, which provide companies with the ability to maintain continuous operations of technology and people in the event of natural disasters, civil disruptions and other unforeseen occurrences, Mr. Riefs said. This will be done by partitioning a part of the store off and providing a separate entrance.
Both Sears and Kmart stores will be used for wireless and wireline equipment needs via rooftops and so called meet-me-rooms, where equipment will actually go in the building. Seventy percent of the U.S. population lives within 10 miles of a Sears or Kmart store, Sears says.
With the unit, Sears is coming up with another creative use for its stores and land. Sears and Kmart stores often lack significant numbers of customers, leading to the company trying to become novel with the real estate if the stores are closed. Sears has sublet space to other retailers and restaurants and even leased space for a bowling alley to be built in one of its parking lots.
Sears "has always tried to be creative about how they leverage their assets," said Paul Swinand, retail analyst at Morningstar. "But it also likely says they don't have retail tenants lined up for these stores."
"The store sites have 'existing power, fiber and security conditions that meet the specific needs of data center, business continuity and communication operators,' Mr. Riefs said."
Please go into any Sears/Kfart operation and I will personally guarantee that if you ask any associate about their "existing power, fiber and security conditions," they will explain to you that even Fred Flintstone considers these so called "conditions" archaic. Who is this "Mr. Rief?" A relative? Why would he say such a thing? Yes, your right, poor fish needs a job! I congratulate the poster who indicated all you have to do is look at the date on the back of the register which is facing you. And trust me, the technology in the back office is even older. We are talking 30 years or more. So what is 'Grief' talking about? Anyone can run a high-speed connection anywhere, including your home. And security? You even have the right to "home defense," I'm sure more effective than what ever this operation could provide. Also credit to the poster who said SHLD can not afford to provide what they are pretending. That poster is correct. And all you are correct about "this is not about the retail." It is about Eddie sucking you in.
Sentiment: Strong Sell
It should be clear by now just how little demand there is for the illiquid real estate holdings that they need to become land lords, better than nothing but it throws egg in the face of those that pumped this stock for years over RE holdings.
Then again, since KCD holds most of the real estate, (as well as the brand names) this won't do anything for SHLD bottom line
I guessing that SHLD will only be a landlord for companies that need the space for data redundancy or to expand their own data centers. Building a true data center can be very expensive and Sears just doesn't have the money to successfully pursue that road.