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Businesses Networking IT

Sears Is Turning Shuttered Stores Into Data Centers 137

Posted by timothy
from the dystopian-or-utopian-you-decide dept.
miller60 writes "Servers may soon fill the aisles where shoppers once roamed. Sears Holdings is seeking to convert former Sears and Kmart stores into Internet data hubs. Some stand-alone stores and distribution centers may be repurposed as data centers, while mall-based stores can be converted into disaster recovery sites, the company says, offering access to stores and eateries for displaced workers who may be on site for weeks. Then there's the wireless tower opportunity. Seventy percent of the U.S. population lives within 10 miles of a Sears or Kmart store, and these rooftops can be leased to fill gaps in cell coverage. It's not the first effort to convert stores into IT infrastructure, as Rackspace is headquartered in an old mall, and companies have built data centers in malls in Indiana and Maryland. But Sears, which operates 25 million square feet of real estate, hopes to make this strategy work at scale." Also at Slash DataCenter.
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Sears Is Turning Shuttered Stores Into Data Centers

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  • by Registered Coward v2 (447531) on Thursday May 23, 2013 @02:01PM (#43805883)
    Your data back.
  • by sinij (911942) on Thursday May 23, 2013 @02:02PM (#43805893) Journal
    New HDD in Isle 6, New HDD in Isle 6!

    I don't understand why place data centers in urban mall environments where property value is supposedly higher?
    • by houbou (1097327)
      Because in the end, that value means nothing if these brick and mortar places don't generate revenues and the demands to store info, requires larger infrastructure. And people are shopping more and more online and less and less in stores.
    • by Anonymous Coward

      Because the cost to retrofit an old and empty store costs significantly less than trying to build a new location from the ground up, once you consider the acquisition of land, the cost of construction plus any infrastructure costs (water, sewer, roads, electricity, possibly gas lines as well - though waste heat may be used to heat the building during winter, if required).

      • by kannibal_klown (531544) on Thursday May 23, 2013 @02:17PM (#43806051)

        Because the cost to retrofit an old and empty store costs significantly less than trying to build a new location from the ground up, once you consider the acquisition of land, the cost of construction plus any infrastructure costs (water, sewer, roads, electricity, possibly gas lines as well - though waste heat may be used to heat the building during winter, if required).

        I don't know... sure you're saving on a bunch of stuff. But you're talking about a building that was never made to handle the kind of stuff a data-center needs.

        For SOME projects, sometimes starting from scratch is easier and cheaper than trying to retrofit an older / existing thing. Because by the time you tear down section A to rebuild it, that's a lot of time and money right there. I don't know if there's enough tear-down in this scenario to qualify but it's something to consider.

        I've worked in a number of stores. Their power situation stunk. In the year 2000 I had to run the aisles and look up prices when the power went out for like 1/2 a day but the boss wanted to stay open. Meanwhile another store I worked at had power issues from time to time. And that was just for running lights, some registers, a photo machine, and a couple of PC's. There wasn't even a refrigerated section.

        So you're talking about re-doing the power INTO the place as well as the power INSIDE the place.

        Then you have to worry about cooling. No raises floors. Weak units. Not laid out for maximum air flow. You're re-doing a lot for the A/C.

        Then security. Some stores have building that aren't exactly well protected if someone really wanted in. Sure there's an alarm but when one whole wall is plexi, the walls are thin, and the doorways weren't setup for protection. It's hard to really offer much protection.

        • by houbou (1097327)
          I believe that you are right, but you are generalizing. And in this case, I think that every building has to be judged by what it offers. In general, most building have adequate levels of power. I've seen scenarios with power or other logistical issues, but overall, having the building in place, is usually a boon and cheaper to retrofit.
        • by Anonymous Coward

          Raised floor is a thing of the past. With all the heavy stuff coming in just for storage, ie EMC VMAX that weighs ~24,000 pounds for 9 bay, it's best if it and everything else is on the concrete floor. Then you install in-row cooling and cold aisle containment. Heat will do what it naturally does which is rise, you want the cold air to be contained who cares about the rest of the data center if it's hot, you just want your servers/equipment cold. Everything from power to cabling to the water for the in-

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Did you not read the article? It specifically said stand alone stores and distribution centers. A distribution center is not a urban mall area and stand alone stores are just that, a stand alone store located on property they own and not part of a mall area kind of like the sears appliance outlet near me that closed but still sits on private property and not located in or near a shopping center or direct urban area.

      Im guessing no you did not read a thing, you saw the headline and at best skimmed the article

      • by hawguy (1600213)

        Did you not read the article? It specifically said stand alone stores and distribution centers. A distribution center is not a urban mall area and stand alone stores are just that, a stand alone store located on property they own and not part of a mall area kind of like the sears appliance outlet near me that closed but still sits on private property and not located in or near a shopping center or direct urban area.

        Im guessing no you did not read a thing, you saw the headline and at best skimmed the article for a second and then posted a comment without actually reading the source material and posted a uninformed response filled with assumptions and what sounded good to you.

        Did you not read the article? It said:

        Although mall-based stores may not be right for data centers, they could be ideal for disaster recovery facilities, Farney said. That includes mall stores that have closed, as well as those that have downsized to a smaller retail footprint

        So unless they are talking about building office space as a DR strategy, then they are thinking about using in-mall stores for DR datacenters. Which are pretty much the same as primary datacenters.

        • by jbengt (874751)
          "Sears" (though really a different company, then) has more or less done this once successfully in the 80's when they launched Discover card. They located most of their call centers/data centers in underutilized stores - back then there was a big push to reduce stock space and do "just-in-time"inventory, so they converted a lot of storage space and poorly performing retail space into office / call center / data processing space. Surprising as it may seem, they typically had sufficient A/C and electrical, t
        • by Macgrrl (762836)

          They may be thinking in terms of where people go in a BCP scenario - so rows of desks with PCs on them waiting for when one of their clients activates it's DR/BCP plan and has to relocate their staff temporarily. A Mall location could potentially work quite well for this kind of application as it will generally have parking and/or good public transport access. It will have access to toilets and other amenities such as food and drink on site already.

    • by Aryden (1872756) on Thursday May 23, 2013 @02:55PM (#43806443)
      Actually it's because of leases. Generally, when an "anchor store" such as sears, belk, etc move into a mall or strip mall, they sign 10-30 year leases on the space. Unlike your general inline stores which sign 6 month, 1 year or variable lease agreements. They have to pay that lease out whether they maintain the store or shut it down. In many places, it is generally cheaper for them to vacate the store and just continue paying the lease without supporting the store itself. I see this as a way for them to continue to honor their lease while being able to generate revenue from it. Additionally, the costs for build a datacenter would be cheaper because you already have loads of parking, electrical infrastructure, security (joke) etc.
      • by khallow (566160)
        That's interesting and answers my question. I was about whine "why aren't they selling that store?" You have done a great mercy for mankind.
      • Well, a lot of other factors come in. Two big ones:
        a) cooling
        and
        b) power

        Another one is structure strength. Depending on what was actually in the floor-space, I wonder about a location's ability to handle a lot of heavy racks and HVAC equipment etc. Believe it or not the weight of all that stuff can be a consideration.

        • by idontgno (624372)
          Indeed. Floor load is a huge consideration. I've seen mainframe installations go catastrophically (and expensively) wrong when floor loading was miscalculated. Unisys mainframe through the floor. (Well, in that case, raised floor; the concrete actual floor was designed for an aircraft factory, so I guess its load capacity was better.)
      • by drcheap (1897540)

        Parking? Since when did you need "loads of parking" for a datacenter? Many of them are at or close to lights-out operations, and even "fully staffed" locations the size of a dept store still only have a handful of employees.

      • by jbengt (874751)
        Actually, Sears has many stores built before the 80's that they own outright. That's just about the only reason they were worth buying out in the first place.
        • Yeah, but if you own it outright, you can sell it. Thirty year lease, and you have to figure out what to do with it.

      • by jbengt (874751)
        Typically I have seen ten-year leases with 5-year options to extend after that. Sears mall anchor stores are older than ten years, so they could have gotten out of those leases relatively quickly if they had wanted to. However, their standalone stores are almost all owned by Sears, no lease involved.
        (sorry about replying twice)
  • ... or malls that have closed completely. But very few mall management firms would sign off on turning one of their anchor stores into a datacenter.

    • by djdanlib (732853) on Thursday May 23, 2013 @02:05PM (#43805935) Homepage

      The summary actually says they are considering this for standalone stores and distribution centers.

      • by Anonymous Coward

        No matter how much I strain, I cannot hear the summary.

    • ... or malls that have closed completely. But very few mall management firms would sign off on turning one of their anchor stores into a datacenter.

      Wouldn't the number of firms that would turn up their nose at someone continuing to pay them rent (especially those malls that can't sustain a Sears, which are probably half empty) be far lower than those who would be grateful for the income?

      • They're called anchor stores because (more so than the other, smaller retail) they serve as a draw. If a particular shopping center is in really bad shape or circling the drain, then sure, it might be one of those very few.

        • Re: (Score:3, Funny)

          by Anonymous Coward

          No. They're called anchor stores because they sell anchors and other nautical equipment. Geesh. Did you even read the article?

      • by jeffmeden (135043)

        ... or malls that have closed completely. But very few mall management firms would sign off on turning one of their anchor stores into a datacenter.

        Wouldn't the number of firms that would turn up their nose at someone continuing to pay them rent (especially those malls that can't sustain a Sears, which are probably half empty) be far lower than those who would be grateful for the income?

        It's not really in question here because Sears is doing this with standalone stores, but an anchor store is exactly like it sounds; once a mall loses its anchors, it is done for, it's not a mall any more, it is a hangout for kids who don't spend money. Mall managers will do anything to keep anchor stores in place, and I mean ANYTHING.

        • One of the links (the "in Indiana" one) points to a datacenter installation in a former mall The other one ("in Maryland") does in fact describe a former anchor store of a still-working malll turned into a datacenter. They apparently (http://www.marleystation.com/directory) still have at least a Macy's and a J.C.Penney's.

          • by jeffmeden (135043)

            One of the links (the "in Indiana" one) points to a datacenter installation in a former mall The other one ("in Maryland") does in fact describe a former anchor store of a still-working malll turned into a datacenter. They apparently (http://www.marleystation.com/directory) still have at least a Macy's and a J.C.Penney's.

            Except neither of those is about Sears, plus: in Indiana the whole mall was bought and converted after it closed, and in Maryland I am pretty sure the store in question is not part of Marley Station, it looks a lot bigger like a standalone department store near a shopping center (but I am not from there so I don't know).

      • by alen (225700)

        in a mall part of the rent is paying the mall a percentage of your revenue for that store. data centers have no revenue like a retail store

    • Dunno. You might be able to get them to do it.

      Don't listen to the Analysts. You guys are every bit as good as Amazon. But what's the one thing Amazon's got that you ain't got? DATACENTERS!"

      The whole thing seems like an April Fool's joke, until you realize that these are the people who thought that buying K-Mart was a good idea.

      • by jeffmeden (135043)

        Dunno. You might be able to get them to do it.

        Don't listen to the Analysts. You guys are every bit as good as Amazon. But what's the one thing Amazon's got that you ain't got? DATACENTERS!"

        The whole thing seems like an April Fool's joke, until you realize that these are the people who thought that buying K-Mart was a good idea.

        You have that backward, K-Mart was the one who bought Sears (though it is more casually described as a merger). Sears was near bankruptcy and K-mart had the upper hand. Yes, it was a messed up world back then.

        • by Belial6 (794905)
          The way I heard it, it was more like two drunk guys trying to hold each other up.
    • If one of your "anchor" stores is Sears you're already in trouble...
    • ... or malls that have closed completely. But very few mall management firms would sign off on turning one of their anchor stores into a datacenter.

      Anchor store? Probably not.

      But 30,000+ sq ft of space that's not turning a profit? Absolutely.

  • Talk about.. (Score:5, Insightful)

    by houbou (1097327) on Thursday May 23, 2013 @02:06PM (#43805945) Journal
    recycling, good to see that these structures will serve a purpose beside being shopping stores! :)
  • by Joe_Dragon (2206452) on Thursday May 23, 2013 @02:09PM (#43805981)

    there is a blue light special on red light web sits to day.

    red light as in web sites that have slowed down to a stop.

  • This is just as stupid as the other stuff Sears has done (or not done) over the last 20 years to slowly go out of business. Sears and K-mart stores are "retail" land uses and are located on land appropriate for retail. This means that there is a) a sizable nearby population base to draw customers from, b) access via high-volume roadways, c) lots of onsite parking, d) other retail nearby to draw retail customers, etc. None of these are important for a "Data Center" which can be located (and often is) in a

    • They also have so much corporate experience in the data center industry. Why don't they just open a hospital while they are at it?
      • by iggymanz (596061)

        I was thinking airport with those big parking lots

      • by jbengt (874751)
        Sears does actually have experience with data centers. They've built and managed their own data centers (including a whole floor in the building previously known as the Sears Tower) and they've run credit card systems both for themselves and for other businesses. I don't know if they have useful institutional memory about it, though.
    • by iggymanz (596061)

      I'm concerned about maximum floor loading for the multi-story retail buildings vs. what a bunch of 3000 lbs. 47u racks can do.

      • by suutar (1860506)
        unless they seriously rework the power and AC I'm not sure they'll have enough total weight to be a problem anyway. And if they do seriously rework the AC they can probably reinforce the floors while they have the ducting out.
        • by iggymanz (596061)

          no, you can't just go in after the fact and change the load limits on floors for a building. we're talking about essentially putting the kind of weight a parking garage would bear. nothing in the building could take it, not the foundation, not the columns, not the floors and not the lateral beams.

    • by todfm (1973074)

      Not all retail space is high-value anymore. There are a lot of old Sears and Kmart stores in completely dead areas that have no traffic. And why would it be better to use the old stores for more retail instead of data centers? Like America needs more plastic shit.

      • by iggymanz (596061)

        brilliant, put data centers in ghettos like what's left of Detroit. what could go wrong? jimmeh teh gangbanger gonna get a lot of bling and crack for pawning those servers and disk arrays....

        • by mattb47 (85083)

          Well, you're not going to put datacenters in run-down sections of Detroit, or any other crime-ridden city. But how about all those semi-rural communities scattered across America with defunct (or underperforming) K-Mart stores? Especially if they're in regions with cheaper electrical power...

          Sounds rational to me.

          • by iggymanz (596061)

            thanks to Bush-Cheney and then Obama, those are becoming or are ghettos. visiting my relatives in southern illinois, its become the third world down there.....

    • This is just as stupid as the other stuff Sears has done (or not done) over the last 20 years to slowly go out of business. Sears and K-mart stores are "retail" land uses and are located on land appropriate for retail. This means that there is a) a sizable nearby population base to draw customers from, b) access via high-volume roadways, c) lots of onsite parking, d) other retail nearby to draw retail customers, etc.

      All of the KMart stores in my area - and I include in this the ones that are currently closed, which is most of them - are located in parts of town that used to be high-traffic retail but aren't anymore. The other businesses in the area are mostly commercial services and specialty. One I can think of that is still open is pretty much surrounded by large car dealerships. The KMart where I had my first part-time job closed over a decade ago. The building is now used as a warehouse for a construction suppl

      • by dtjohnson (102237) on Thursday May 23, 2013 @04:54PM (#43807457)

        A K-mart store in my area stood empty for 6 years. The parking lot had weeds growing up, there was graffiti on the walls, and nearby small businesses were of the low-revenue, low traffic type with a lot of retail vacancies. This was for a store that was in a relatively affluent area with a lot of traffic going by every day. The problem was that the ownership of the store property was tied up in legal issues and no one could do anything with it. Maybe it was Sears or K-mart pre-bankruptcy or someone else. Anyway, finally, finally, the legal problems got resolved and the store was gutted and redeveloped into an LA Fitness and a Walmart food store. That was two years ago. Now, the whole block is thriving, parking is hard to find, and a nearby corner gas station was torn down to make way for construction of another retail block. The point is that sometimes the reason that the store property is no longer in a 'prime retail location' is because of the property owner. The same thing happens in residential neighborhoods when someone moves in and parks a lot of old cars around the house, lets rusting trash pile up, stops mowing the grass, and does not repaint when the paint is peeling.

  • HP used to have a big office park in Palo Alto that was converted from an old indoor mall. Recycling big buildings isn't a bad idea.

  • That would be poetic... justice.
  • When Sears purchased Kmart, some discussion related to the fact that Kmart holdings wasn't a retail company - it was a real estate investment company that happened to have stores on its investment property. This is the same - Sears owns a lot of property and this lets them pay for taxes and upkeep until they unload it.
    • by 7213 (122294)

      Sears Holdings isn't a retail company, or an IT company, or a realistate company, they are a hedge fund trying to squeeze out all the possible paper value from their assets. So that they can eventually convince some other sucker to buy these assets.

      This is a continuation of some rather silly decisions that they've been making for some time.

    • by fermion (181285)
      This may be a difference between KMart and something like Walmart. There are stand alone Sears stores in my area and while they are not the best place to shop, they have been able to keep up The mall stores that close are mostly at malls that close completely. Otherwise they are replaced with new tenants.

      The KMarts are pretty much completely gone, but those building now house other retailers. There seemed to have a motivation to lease the spaces.

      OTOH the Walmart that was built in the first Wave of the

  • They should turn ALL Sears stores into data centers!

  • this is great! (Score:4, Insightful)

    by Charliemopps (1157495) on Thursday May 23, 2013 @03:38PM (#43806839)

    For some reason, every time they want to put up a new store, they build new. Meanwhile, when the old stores get closed they just sit and the building never gets used. It's almost like ringworm, you get this ever expanding ring of dead stores that expands out for the city center. Every day I drive by 3 abandon grocery stores and even worse, new construction for 2 new stores of about the same size!

    Its good to hear they are doing something with at least some of them.

  • Old news (Score:5, Interesting)

    by onyxruby (118189) <.onyxruby. .at. .comcast.net.> on Thursday May 23, 2013 @04:07PM (#43807099)

    Retailers have been doing this kind of thing for many, many years. The first indoor big box shopping mall every built (Southdale) was built just to have a place to attach a Dayton's store too. I got my start in IT in operations for a large retailer, working with the real estate team in setting up and closing down store properties was part of my job. Many retailers have as much business in real estate as they do in retail and this has been the case for years.

    By way of point Home Depots are often located near Target or Walmart since they buy large tracts of land for their stores and as a defensive measure to keep the other companies store from being put up nearby. They then use the best space for their own and develop strip malls around their property. When they have a lot just the right size for a big box retailer they will lease it to someone like Home Depot just to keep the land from being used by the competitors as many cities have will build taxes for unused property.

    McDonalds has been known to buy a large tract of land and build a strip mall just to ensure that they get a restaurant in a prime location. When stores closed down the realtors then find other uses for the store. This is something that the retailers have been doing for decades with professionally run and managed real estate companies that they own. There are even special tax exemptions to allow these operations with special discounts.

    When Icahn wanted to do a hostile takeover on Target a year or two back his highest priority to get in - sell their property off for great profit - and get out. The only thing that is new about this case is that Sears wants to get into the data center hosting business. If they bring in professionals (which the article says is exactly what they are doing) to run it there is no reason that you couldn't see Sears do very well in a very short time doing this.

  • "Disaster Recovery", huh. Sounds like a cover for a Z-day survival stash. Everyone knows to head to the mall at first sign of a mysterious outbreak, right?
  • I was working for Sears (as a retail minion) when they mostly shut down their paper catalog operations, as the internet was becoming a thing.

    I saw it then as a huge mistake, as with their experience with order processing and shipping they would have had a HUGE head start against upstarts like Amazon.

    But corporate inertia, along with MBA's probably would have ruined them anyway.

  • yah its wasn't a real Hutch but they licensed the name. But hey when you're 14 and its 1/3 the price of a real one you'll love it just as much.

  • Made a pretty good datacenter too. Already had a loading dock, concrete slab floor, & plenty of HVAC installation points.

  • And thus it was that Skynet was created in the middle of suburbia... invading all aspects of our daily lives. I for one welcome our new distributed datacentre/robot overlords.
  • by Ralph Spoilsport (673134) on Thursday May 23, 2013 @08:46PM (#43808739) Journal
    When Amazon buys sears not for their retail system but for their IT infrastructure....
  • It took me a while to understand why it would be possible to abandon in-city retail place, but I think I got the idea: since all US shoppers go the retail place in their car, there is not more value for a specific place in the town, you can just open a new place a bit more far away, shoppers will follow.

  • We could no longer afford to shop at sears.
  • It seems like every Sears and KMart I've ever been in while there was heavy rain showed leaks in the roof. Unless they plan on using that as auxiliary cooling I sure hope the structures are carefully evaluated prior to putting infrastructure in.

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