The holding company that runs Sears is reported to be exploring the idea of shuttering its namesake Auto Center stores and opening commercial data centers.
Sears Holdings oversees all of the company's assets from its services and retail brands to Kmart and Sears department stores. Sales at Sears are floundering, and the holding company has been routinely selling off its business units and property (albeit there are a few bright spots in its retail business).
Sears is exploring a partnership with Schneider Electric, a company that designs, plans and operates data centers, according to Sean Farney, the Chief Operating Officer of Ubiquity Critical Environments, a subsidiary of the holding company. Sears had initially planned to convert entire brick-and-mortar retail centers, but has opted for a more targeted approach based upon a market analysis of the IT industry.
"We have a unique asset, which is a lot of real estate that's permitted and zoned so we can move quickly (if we take this beyond the concept stage)," Farney said in a Data Center Knowledge article published today. The article noted that many Sears Auto locations are standalone buildings and well suited to house hardware.
The train has left the station
None of this should come as a surprise. I was once given a business school case study assignment that examined the history of Sears and its failure to adjust its business model as the world changed. Sears sold bulk items directly through catalogues and had efficient distribution through railroads and post offices. The company made many of its own products and had a strong reputation for quality.
Consumer buying behavior changed over time, and stores like Walmart and Target began to compete on price and rapidly expand their retail locations throughout rural areas. Sears began a prolonged decline that was hastened by online shopping. The original business model was no longer applicable.
My strategic management professor said something along the lines of "Sears would be better off if it just closed down and did something else." That may very well be the case (to some extent) as the company assesses where it fits into the 21st century marketplace. IT is a trillion dollar business.
Amazon, a retail rival to Sears, believes that its brightest future lies in its cloud business as Web services become increasingly more pervasive in IT. Maybe Sears is actually onto something with its data center plans.
This post was originally published on Smartplanet.com