- Sears is widening the licensing and distribution for some products under its Kenmore and DieHard brands, the company said Tuesday in a press release. Terms of the arrangements were not disclosed.
- Cleva North America, which produces the DuraVac and ArmorAll brands among others, is set to manufacture Kenmore and Kenmore Elite vacuums and accessories for distribution at retailers worldwide, according to Sears. Cleva President Bob Davis said in a statement that the products will go to "key retailers," without naming who those were. "We’re partnering with the licensees to determine the best retail outlets," a Sears spokesperson said in an emailed statement. "Nothing has been finalized."
- Additionally, Dorcy, a maker of LED flashlights and other products, is manufacturing DieHard Alkaline batteries and flashlights for distribution to retailers in the U.S. and Puerto Rico, as well as countries in Latin America, the Caribbean and South Pacific. Both Cleva and Dorcy will be responsible for shipping the branded products to retailers, according to the Sears spokesman.
Sears’ new licensing agreements for Kenmore and DieHard comes just over a month after the ailing department store retailer said it would sell Kenmore appliances through Amazon — a deal that won much attention and even some accolades for Sears from Wall Street.
Announcement of the Amazon deal sent Sears stock up and dragged down those of other appliance retailers, including heavyweights Home Depot and Lowe’s. (According to CNBC, the announcement of the agreement with Amazon wiped out $12.5 billion from the market caps of Home Depot, Lowe’s, Best Buy and Whirlpool at the time.)
But there are plenty of skeptics who don't think Sears can revive the flagging Kenmore brand, not even by teaming up with the hottest player in retail right now. In a July note, Jeffries analyst Daniel Binder described the market reaction to the Sears-Amazon team up as "overdone," noting that "Kenmore brand equity has declined." More bluntly, he described Kenmore as "a dying brand."
Binder argued then that "just because Kenmore is available on Amazon doesn’t mean customers are going to want this dying brand anymore than they do now, especially as news of Sears’ future grows more negative and the industry moves toward more smart appliances, hence giving customers more options beyond Alexa."
As for Sears, it would have to sell a lot of appliances through Amazon and its new licensing agreements for the expanded distribution to have any meaningful impact on its performance or overall financial trajectory, which has been mostly bleak of late. (The company issued a "going concern" warning to investors earlier this year.)
David Silverman, senior director for retail coverage at Fitch Ratings, told Retail Dive in a July interview that he didn’t think the Amazon deal was "a game changer or a material change in any way," given Sears’ ongoing need for $2 billion in liquidity annually.
And while Sears could boost sales of the Kenmore brand through the Amazon deal, the retailer also runs the risk of cannibalizing sales from its stores. "Is every sale they do [on] Amazon potentially taking market share from someone else, or is it a sale they would have done out of their own store anyway, and potentially less lucrative because Amazon takes a piece of that?" Silverman said. That said, data from the partnership and the possibility that customers wil come to Sears to "showroom" appliances could benefit the retailer.
While today Sears is inking new licensing and distribution deals for the Kenmore and DieHard, earlier this year it was looking for buyers for the brands along with Craftsman, which it ultimately sold to Black and Decker for $900 million.