When Sears (OTCMKTS: SHLDQ) filed for Chapter 11 bankruptcy protection in late 2018, many investors weren't shocked. The struggling retailer's liabilities well exceeded its assets at the time, and while the company has since tried to reorganize its debts and reinvent itself, it's unfortunately been highly unsuccessful. In fact, Sears is now down to just 74 stores, compared to nearly 1,000 locations as of February 2018.
The main problem? Sears is no longer a destination. Shoppers in search of budget-friendly retailers have other, more appealing stores to turn to -- think Target (NYSE: TGT) and Kohl's (NYSE: KSS), while high-end shoppers were never really drawn to Sears in the first place.
Still, if there's one thing Sears continues to be known for, it's space. Sears stores often served as mall and shopping center anchors by virtue of their square footage alone. But thankfully, Sears seems to have found a new purpose -- serving as a vaccine distribution center during the coronavirus pandemic.
Putting unused space to good use
Rolling out a new vaccine on a national level is no easy feat. To pull it off smoothly, vaccine administrators are aiming to create megacenters where hundreds of people can move in and out in a single day, sort of like a well-oiled assembly line. And for that, large, open spaces are a must. After all, there's no sense in gathering people to receive a vaccine if doing so means exposing them to COVID-19 before they're immune. That's why vaccines need to be administered in buildings that lend to social distancing and solid ventilation.
Those mammoth stores may no longer stock goods, but they're a great spot to gather people to roll up their sleeves. Not only is Sears known for its massive floor plans, but many locations can be found adjacent to highways and other main roads, making it a convenient spot to access. And given that many people are skittish about taking a new vaccine to begin with, ensuring that accessibility isn't a barrier is crucial.
Of course, the fact that Sears is already being used as a vaccine center in Iowa isn't that surprising. In many parts of the country, closed malls have previously been repurposed and converted to coronavirus testing centers and are now being expanded for vaccine distribution. And some older Americans -- those who spent the better part of adulthood shopping at Sears -- may actually take comfort in the idea of getting vaccinated in a place they remember frequenting.
Looking to the future
Sears is a dying brand -- there's really no getting around that. But the fact that it's being used as a vaccine center should give hope to real estate investors that closed stores need not translate into lost revenue. In fact, converting empty stores into healthcare centers is a viable idea even once the pandemic is long behind us. Better access to medical care could help more people keep better tabs on their health, and repurposing vacant malls and department stores is a good way to benefit investors and consumers/patients alike.