Quoted – Sears/Kmart offers to rent Valley stores

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n an unusual move, the owner of Sears and Kmart is publicly seeking out additional businesses to operate in its stores, including several Valley locations.

Sears Holdings Corp. launched a website earlier this year detailing information about store locations available to rent — in both closed stores and ones still open.

Five Valley stores show up on http://www.shcrealty.com as places the company would welcome new businesses operating within the existing stores. They include Kmart stores in Clovis, Coalinga and Kingsburg, and Sears stores and their auto centers in Sierra Vista Mall in Clovis and Manchester Center in Fresno.

“Traditionally when retailers look to do things like this, they usually do it quietly,” said Scott Testa, a professor who follows the retail business at Cabrini College in Philadelphia. “The idea that they would do this in a public forum … is in some ways very unique.”

New tenants could locate within a current store — either a cart or a shop — or in another empty space in a Sears Holdings-owned shopping center.

“It’s basically letting people know that in these locations we have some extra space,” said Sears Holdings spokeswoman Kim Freely. “If the partnership makes sense, we could make some additional retail space available for other vendors.”

Freely used the example of Edwin Watts Golf Shops, which is opening 12 shops inside Sears stores around the country.

It’s not unusual for stores to open within larger stores — think Starbucks inside Target or Sephora’s recent appearance inside J.C. Penney stores.

Although not typical, Sears’ real-estate website is just another form of marketing, said Walter Smith, senior vice president of Grubb & Ellis/ Pearson Commercial realty firm in Fresno.

“They’re just helping to make sure they get as much exposure as possible,” he said.

Sears owns many of the properties its stores are in, Smith said.

When billionaire investor and Kmart chairman Edward Lampert bought Sears and merged the two companies in 2005, Wall Street analysts expected the new company to make money selling valuable locations.

The real estate crash prevented that, however, and Sears Holdings was stuck with 3,900 full-line and specialty stores. The company closed 60 underperforming stores in 2009, but remains a company “that is struggling to find its way,” competing against heavy hitters like Target and Walmart, Testa said.

Testa said the website could be a way for the company to find out if it can make more money leasing to another retailer instead of operating a Sears or Kmart, but Freely from Sears Holdings said that is not the intent.

Smith and representatives from Sierra Vista and Sears Holdings all said no deals for new stores inside Sears or Kmart stores in the Valley had been finalized.

But, said Smith, “it could be happening in our market, and that’s OK.”

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