Sears to Sell Kenmore Brand on Amazon -- 2nd Update

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 [e-mail] and Imani Moise at [e-mail]

(END) Dow Jones Newswires

July 20, 2017 12:04 ET (16:04 GMT)

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