Business

Sears turns to unlikely partner: Amazon

They will partner to sell Kenmore appliances.

Chicago Tribune

July 21, 2017 at 3:27AM

Sears was drawn to Amazon’s reach and e-commerce expertise, while Amazon liked Sears’ ability to deliver and install products. (The Minnesota Star Tribune)

CHICAGO – Sears is calling on Amazon to help it sell more Kenmore appliances.

The embattled retailer announced Thursday that it will begin selling its full line of Kenmore appliances on Amazon, significantly expanding distribution of one of the retailer's best-known brands.

They make an odd couple — a struggling retailer and a company growing so fast it has raised antitrust concerns.

But the announcement fits in with Sears' effort, started last year, to generate cash from its Kenmore, Craftsman and DieHard brands by widening distribution outside its stores.

Corporate parent Sears Holdings agreed to sell the Craftsman tools brand to Stanley Black & Decker earlier this year for an estimated $900 million.

In February, Sears signed a deal to allow California-based Permasteel to manufacture Kenmore grills for distribution at retailers nationwide, and Ace Hardware sells Kenmore water heaters and softeners.

But in the U.S., most Kenmore products, including major appliances, have only sold through Sears.

"This will significantly expand distribution and expose the brand to new customers, and we're hopeful it will lead to a lot more sales," said Kenmore Brand President Tom Park.

Sears, in announcing the partnership with Amazon, declined to comment on the terms of the deal.

Shares of Sears Holdings jumped 10.6 percent Thursday to close at $9.60. Shares of other appliance retailers fell on the news.

Sears was drawn to Amazon's reach and e-commerce expertise, while Amazon liked that Sears could provide delivery and installation along with the product, according to Park.

"Service is as much a part of this as the product is, and Amazon was looking for a partner that can deliver on all fronts," he said.

The company's Sears Home Services and Innovel Solutions businesses will handle installation and delivery. The services will have a fee — so no, shipping won't be free.

Sears is testing the combined online sales and delivery services in Los Angeles, where it will begin filling orders next week, before rolling out Amazon sales throughout the country, Park said.

The Kenmore appliances sold on Amazon will include the brand's line of smart home appliances, which are integrated with Amazon's voice-controlled Alexa platform.

For now, the appliances will only be sold to U.S. Amazon customers, but Park said Sears may consider international sales in the future.

The deal with Amazon also would not limit Sears' ability to keep leveraging the Kenmore brand with licensing deals, but Park said Sears is focused on making the Amazon partnership successful.