Can Sears Save Its Appliances Business By Partnering with Amazon?

Amazon and Sears have been in the news a lot lately, but for the opposite reasons: one is growing while the other is struggling. Today, though, they share bylines as it turns out that Sears is the latest on a quickly growing list of retailers to sign deals with Amazon.

On Thursday, the classic American department store chain announced plans to sell its Kenmore-branded appliances on the e-commerce giant’s site. Sears also made sure to note that it plans to integrate its Kenmore Smart appliances with Amazon’s Alexa voice-activated digital assistant platform.

With news of this move, shares of Sears stock jumped up more than 25 percent in trading before market open, today.

According to Sears CEO Eddie Lampert, “The launch of Kenmore products on Amazon.com will significantly expand the distribution and availability of the Kenmore brand in the US.”

He goes on to say, “At the same time, Sears Home Services and our Innovel Solutions unit will benefit from the relationship as more customers experience their quality services for Kenmore products purchased on Amazon.com”

Anyone who is familiar with the history of Sears—and department stores as a whole, actually—knows that major home appliances has long been their bread and butter. Unfortunately for Sears, though, the market has become more crowded with the addition of big box stores like Best Buy and wholesalers like Costco—and now discounters like Wal-Mart—creeping in to steal more and more of the market share.

Struggling with heavy debts and slowing sales, Sears has been losing ground quickly, restructuring and selling off assets in the meantime. This move could be quite the turnaround the company needs to boost sales; but, at the same time, the original goal was to get shoppers to return to physical Sears stores.

But if market activity is any indication, shares of home appliance competitors—like Whirlpool, Home Depot, and Lowe’s—showed declines, on Thursday morning, after Sears made the announcement.

Finally, GlobalData Retail Managing Director Neil Saunders comments, “This is consistent with Sears’ aim of becoming more of a remote seller of strong brands without the encumbrance of expensive real estate. The move makes sense as it puts Sears’ brand products where customers are shopping and gives them a better chance of selling.”

He adds, “That said, in the short term it may create even fewer reasons to visit Sears’ shops, which could put further pressure on that side of the business.”

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