Sears Becomes Amazon’s Newest Partner

Struggling Sears is looking for help from the company that’s responsible for much of the retail industry’s woes: Amazon.

The embattled retailer, headquartered outside Chicago, announced Thursday it will begin selling its full line of Kenmore appliances on Amazon, significantly expanding distribution of a brand that, until now, was largely only sold through Sears.

The product line will include smart home appliances integrated with Amazon’s voice-controlled Alexa platform.

It’s an odd pairing: a struggling department store chain that has spent years trying to halt shrinking sales and push its own online marketplace, and an e-commerce behemoth that’s growing so fast it has raised antitrust concerns.

But the move fits with Sears’ efforts to generate cash from brands that still have cachet, and could help Amazon get a foothold in a product category — major appliances — where it’s not yet a top player.

“It’s one of the best merchandising moves [Sears] has made in years,” said Craig Johnson, president of Customer Growth Partners.

Earlier this year, corporate parent Sears Holdings agreed to sell the Craftsman tools brand to Stanley Black & Decker for an estimated $900 million. It also inked 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 been sold through Sears.

Expanding distribution to Amazon gives consumers one less reason to visit Sears. But some probably weren’t shopping there anyway — especially not the young millennials outfitting new homes with appliances, Johnson said.

“They don’t recognize the history and tradition of the Sears name like their parents would,” Johnson said.

Both Sears and Kenmore have seen their share of major appliance sales in the U.S. fall in recent years, according to Louisville, Ky.-based Stevenson TraQline.

During the 12-month period that ended in March, Sears accounted for 21.8 percent of major appliance sales in the U.S., down from 30.1 percent four years ago. The Kenmore brand’s major appliance market share fell from 16.7 percent to 10.3 percent during the same four-year period.

“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 declined to comment on the terms of the deal.

The partnership could also help Amazon grow its share of all sales of major appliances, which stands at just 1 percent, according to Stevenson TraQline.

Sears stock closed up 10.6 percent Thursday, but the stocks of other appliance retailers fell on the news. When the market closed, Home Depot and Best Buy shares were down around 4 percent, while Lowe’s was down 5.5 percent.

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.

The deal with Amazon also will not limit Sears’ ability to keep leveraging the Kenmore brand with licensing deals, Park said.