UBS: Data Center Construction Boom Creates Unexpected Tailwind for Select Retail Apparel Stocks
Claire Weston
UBS analyst Jay Sole argues massive data-center buildouts will lift local spending enough to boost ANF, URBN, ATZ and two other apparel names — a second-order effect almost no investor is pricing in.
How does building data centers help clothing stores?
UBS's logic chain: a single ~$1 billion data-center project creates 1,000–5,000 temporary construction jobs over a multi-year build cycle.
This means → workers stationed locally for years spend on food, housing, and clothing, lifting the host county's GDP growth by 1–3 percentage points.
In plain terms = a data center is a years-long "super construction site" — more workers nearby, more foot traffic at local apparel and shoe stores.
Which five stocks did UBS flag?
UBS Evidence Lab — the bank's internal data-analytics unit — cross-referenced its data-center construction database with retailer store-location data, filtering for stores within a 10-mile radius of active projects.
The five names with "highest relevant exposure": Abercrombie & Fitch (ANF), Urban Outfitters (URBN), Aritzia (ATZ), Steven Madden (SHOO), and Macy's (M).
This means → these five have the largest share of stores in data-center-dense areas, giving them the most leverage to local spending gains.
Who landed on the low-exposure list — and what's the gap?
Low-exposure names include Kohl's (KSS), Bath & Body Works (BBWI), Buckle (BKE), Boot Barn (BOOT), and American Eagle (AEO) — their store footprints overlap less with data-center hot zones.
Within off-price retail the split is stark: Ross Stores (ROST) ranks highest, TJX lowest.
Put simply = same industry, different luck — stores that happen to sit next to the "super construction site" capture the spending; those elsewhere do not.
How big is the spending pool — and why hasn't the market caught on?
Goldman Sachs previously estimated hyperscalers will spend $800 billion on data-center construction this year; the build phase overall requires roughly 5 million temporary construction jobs and about 697,000 permanent operations roles.
Sole notes that virtually no investor he speaks with examines data-center buildouts through the lens of apparel-retail impact.
This reflects a classic perception gap: while everyone watches AI compute and chips, the second-order consumer effect sits in a pricing blind spot — and that blind spot itself may be where the investment opportunity lies.
Content is for reference only, not financial advice.