Sears Holdings Corp. launched a real estate website, SHCRealty.com, to not only lease or buy closed stores but also to lease in-store space and out-of-store property.
SHCRealty.com, quietly launched in March, currently lists 67 shuttered stores available to buy or lease. Another 3,779 stores offer opportunities to either rent space for in-store shops, lease land adjacent to existing stores, or lease land in an out lot (typically on the outskirts of a store's parking lot).
One such in-store deal with Edwin Watts Golf Shops was announced last Thursday. Edwin Watts will operate shops inside 12 Sears locations, located near electronics, tools, and sporting goods departments.
Sears also is seeking deals with licensed businesses and "strategic partnerships to creatively reuse nontraditional space for specialty marketing opportunities," according to the website. Beyond Sears and Kmart stores, the stores available cover its auto centers, hardware stores, outlets, Sears Essentials and Great Indoors. The database is searchable by state, region, market and store.
Sears spokeswoman Kimberly Freely told the Dow Jones Newswire that people in the past had contacted Sears to create lists of available real estate opportunities and the website eases the marketing of properties.
"We're definitely reaching out to a broader audience," said Ms. Freely. "We've put it online and made it more accessible."
While not unusual for retailers to look for tenants for empty stores, the size of the effort was said to be unheard of.
"I don't know anybody who's done it at this scale," Alan Barocas, a retail real estate consultant and former senior vice president of real estate for Gap Inc., told the Chicago Tribune. "It's a way for them to generate revenue from their real estate. It's purely an income stream."
On the downside, the move comes amid a depressed retail real estate market. Shopping center owners looking to fill their own under-utilized space may also block such efforts.
But analysts said the move makes more sense if chairman Edward Lampert's long-term goal is moving Sears star brands such as Craftsman, Kenmore and Diehard online and slowly reducing its exposure to its underperforming stores. According to research firm Kantar Retail, the average sales per square foot in 2009 was $111 at Sears stores and $107 at Kmart stores versus $280 at Target and $416 at Wal-Mart.
"Sears isn't using its space in its stores effectively," Paul Vogel, principal at Realty Development Research Inc., a retail real estate consulting firm, told the Trib. "They have more space than they need."
Discussion Questions: What do you think of Sears Holding's real estate website? Will it be more beneficial for leasing space inside existing units, selling/leasing full stores or some other use?