Sears Ends Partnership With Whirlpool
Sears Holdings Corp. (NASDAQ:SHLD) has announced that it will no longer be selling Whirlpool appliances. Sears told employees in a memo sent to stores last week. Sears is also pulling Whirlpool-made KitchenAid, Maytag and Jenn-Air products from its floor. The end of the Sears-Whirlpool partnership is effective immediately.
The move comes after a pricing dispute between the companies. Sears said in the memo that Whirlpool made pricing demands “that would have prohibited us from offering Whirlpool products to our members at a reasonable price.”
Whirlpool CEO Marc Robert Bitzer said that the decision to pull the brand came in the spring. Bitzer said, “We did inform Sears in May that we would no longer supply Whirlpool branded products as we simply could not reach terms that are acceptable to both parties.”
In its memo, Sears said the retailer “will continue to make available top brands that members expect from us including LG, Samsung, GE, Frigidaire, Electrolux, and Bosch.” Sears will only sell what Whirlpool products are currently in inventory. Bitzer said Whirlpool will continue to supply to Sears 10 appliances sold under the Kenmore brand.
The business partnership between Sears and Whirlpool dates make more than 100 years. Whirlpool began making two types of wringer washers for Sears, Roebuck and Co. in 1916, according to Whirlpool’s website. At the time, Sears operated exclusively through mail order.
Some analysts see the move as a sign that Sears is becoming less relevant in the retail market. The news nailed the stock prices of both companies. Sears shares fell more than 8 percent and Whirlpool was down almost 11 percent.
Sears was once America’s most famous retailer, but is no longer a dominant player in the marketplace. The company is facing growing competition from Amazon.com and other retailers such as Home Depot. Its competitors continue to take a bigger slice of the territory Sears dominated for decades.
The retailer initiated a restructuring program earlier this year with the aim of cutting $1 billion in costs annually and reducing debt by $1.5 billion. Sears announced it would close more than 300 Sears or Kmart locations this year as part of the cost-cutting campaign. The company has also sold one of its most valuable brands, Craftsman, to Stanley Black & Decker.