Sears Holdings struck a deal to sell its Kenmore brand on Amazon.com in a classic if-you-can’t-beat-‘em-join-‘em deal that gave hope to the ailing department store chain’s investors.
The move marks the first time Sears has sold products directly through the site, spokesman Howard Riefs said in an email.
Previously, some Sears products were available through third-party sellers on Amazon, the arch-nemesis of the brick-and-mortar retail industry.
The agreement includes sales of Kenmore home appliances paired with Sears’ home services offering, giving the retailer a fresh opportunity to extend its reach into the homes of millions of Americans who spurn physical stores.
The deal gives Sears a chance to restore its relevance while also affording Amazon a new offering in the market for appliances.
Thrilled investors drove Sears shares up 13.4% to $9.88 at 1:14 p.m.
"We continuously look for opportunities to enhance the reach of our iconic brands to more customers and create additional value from our assets," Sears CEO Eddie Lampert said in a statement. "The launch of Kenmore products on Amazon.com will significantly expand the distribution and availability of the Kenmore brand in the U.S.”
The partnership illustrates a recent trend of traditional retailers that have long fought Amazon deciding to embrace their rival, CFRA Research equity analyst Tuna Amobi said. The latest was apparel maker Nike, which agreed to sell certain products directly on Amazon.
"Up until this point many of these brands have been somewhat reluctant to embrace Amazon, but we’re seeing more and more of that now," Amobi said.
Though Sears warned earlier this year there was “substantial doubt” about its long-term survival, the company has announced a series of measures designed to give the company a fighting chance.
The retailer has shed more than $1 billion in costs through store closures and other measures and recently sold its Craftsman brand to Stanley Black & Decker for the equivalent of $900 million.
The latest deal also allows owners of Amazon’s Alexa digital assistant to control digitally connected Kenmore appliances. That aspect was particularly appealing to Amazon, Amobi said.
"This is another way for them to advance the penetration of that technology," he said. "This allows you to be able to activate your washing machine with voice control. It sounds quite appealing in some respects."
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