- Sears Holdings and Whirlpool are ending a 100-plus-year relationship to sell the appliance manufacturer’s top brands. In a note sent to stores last week, Sears told employees that, effective at the time, "Sears Holdings will no longer carry Whirlpool products, including those of its subsidiaries Maytag, KitchenAid and Jenn-Air, within the range of appliances and small kitchen appliances offered in our stores and websites."
- The company added in the note, which a Sears spokesperson sent to Retail Dive, that Sears will continue selling off Whirlpool inventory currently housed at Sears distribution facilities, until that inventory is sold off. The Sears spokesperson told Retail Dive in an email that Whirpool’s relationship with Sears to build Kenmore-branded products was not affected by the decision. Sears expects to continue selling appliances from other top manufacturers, including LG, Samsung, GE, Frigidaire, Electrolux and Bosch, according to the note to employees.
- According to the Wall Street Journal, Whirlpool told Sears in May that it would stop supplying the department store retailer with products. In its note last week, Sears told employees: "Whirlpool has sought to use its dominant position in the marketplace to make demands that would have prohibited us from offering Whirlpool products to our members at a reasonable price. Associates should continue to sell with confidence our Kenmore brand, a market leader in every major appliance category."
Whirlpool just made it more difficult for Sears to recover lost market share in the appliance market — a historical strength for the retailer.
According to the Wall Street Journal, Whirlpool CEO Marc Bitzer said that Sears has accounted for a decreasing share of Whirlpool’s overall sales, to about 3% today. "It’s not a whole lot," Bitzer said. "These are volumes that are not a major issue."
At least, those volumes are not a major issue for Whirlpool. But it's another blow to Sears, which has been losing appliance share. It's been four years since Sears lost the market lead in appliance sales to Lowe's — and later the No. 2 market position to Home Depot. As of July, Lowe’s, Home Depot and Sears account for about 58% of all appliance sales. However, Best Buy has been closing in on Sears'13% market share and has recently threatened to take the No. 3 spot from Sears.
Sears has also lost ground in its own brands. Kenmore’s market share has slipped precipitously from 40% some 20 years ago to around 12% today, as its customer base ages and younger generations overlook the brand.
Sears is hoping it can reinvigorate Kenmore sales by selling the appliances through Amazon and connecting them to the e-commerce giant’s Alexa voice platform. Some analysts, though, think the partnership with Amazon is too modest to make much difference for the diminished Kenmore brand.
Perhaps more problematically, vendors have reportedly run into trouble insuring shipments to Sears and some have pulled back. As we've seen in numerous cases this year — including Toys R Us, Gymboree and Gordmans — issues with suppliers can quickly spiral into a crisis.