Sears to Sell Kenmore Brand on Amazon -- 2nd Update
July 20 2017 - 12:19PM
Dow Jones News
By Suzanne Kapner and Imani Moise
Sears Holdings Corp. will start selling its Kenmore line of
refrigerators and stoves on Amazon.com Inc.'s website, marking the
first distribution of its kitchen appliances outside of its own
stores.
Sears's shares rose 15% to $10 in morning trading, bringing the
stock into positive-trading territory this year.
The move could be a boon to sales as dwindling foot traffic in
stores has led to years of sales declines. Sears has been facing
increased competition in white goods from Best Buy Co., Home Depot
Inc. and other retail chains.
Amazon will buy the Kenmore inventory, but it will reside in
Sears's warehouses. Innovel Solutions, a unit of Sears, will ship
the goods to customers' homes and provide installation services,
said Sears spokesman Howard Riefs.
"This will give the Kenmore brand access to a new set of
customers who aren't necessarily shopping at Sears," said Dev
Mukherjee, a former president of Sears home appliances, who now
works at a private-equity firm.
Sears's major-appliance sales fell 9.5% in 2016 to $3.76 billion
compared with the prior year, according to Twice, a trade
publication. The retailer ranks third in major appliance sales,
behind Lowe's Cos. and Home Depot, according to a report the
magazine published in June.
The struggling retailer has been looking at strategic options
for some if its top brands for over a year, as sales have declined
and losses have mounted. Earlier this year, it agreed to sell its
Craftsman tool brand to Stanley Black & Decker Inc. for $900
million and the company is still looking at options for its DieHard
brand.
The partnership also marks a big move by Amazon into the
large-appliance business, one of the few corners of retail where it
has yet to penetrate deeply. But it could also give shoppers less
reason to visit Sears stores.
"Any incremental sales that Sears can get through any channel is
a good thing," said Matt McGinley, an analyst at research firm
Evercore ISI.
Some analysts speculated that the deal could be a precursor to
Amazon buying the Kenmore brand outright. Mr. Riefs declined to
comment on the possibility.
The Kenmore name first appeared in 1913 on a sewing machine. The
first Kenmore washing machine was introduced in 1927. The brand is
currently produced by Whirlpool Corp., GE, Electrolux and other
manufacturers.
Write to Suzanne Kapner at Suzanne.Kapner@wsj.com and Imani
Moise at imani.moise@wsj.com
(END) Dow Jones Newswires
July 20, 2017 12:04 ET (16:04 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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