US retailer Sears snaps business relationship with Whirlpool

25 Oct 2017

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US retailer Sears will no longer sell Whirlpool-branded appliances, ending a business relationship that started over 100 years ago.

Sears sent a note to its stores last week, saying Whirlpool was making demands that would've made it difficult to sell those name-brand appliances at a competitive price.

For years Sears has had to contend with heavy competition from stores like Home Depot and from Amazon.com and other online retailers and has been closing stores with competitors taking a bigger slice of the territory it dominated for decades.

According to market research firm TraQline, consumers in the US buy most of their small appliances from Walmart. Amazon ranks second in consumer preference with Sears placing fourth behind Target.

The change to the Sears-Whirlpool partnership comes into immediate effect and Sears is also pulling from its floor products from Whirlpool subsidiaries like Maytag, KitchenAid and Jenn-Air.

According to Sears it would sell off the remainder of its Whirlpool inventory and its stores will now only sell its Kenmore products and other brands like LG, Samsung, GE, Frigidaire, Electrolux and Bosch.

Whirlpool's CEO Marc Bitzer told investors yesterday that the company told Sears in May that it would no longer supply branded products as it could not reach terms that were ''acceptable to both parties.''

According to commentators, the dispute pointed to escalating tensions between manufacturers and retailers over exactly how much items should cost. While retailers had grown accustomed to offering steep discounts to win over consumers, manufacturers say they are struggling to keep up with growing expenses and stiffening competition, often from overseas.

According to commentators, Sears, which was once a dominant seller of appliances, has lost much of its appeal and market share in recent years. It had last reported profit in 2010, and last year posted a loss of $2.22 billion.

''Sears is breaking up with everybody - the business is in steep, deep decline,'' said Mark Cohen, director of retail studies  at Columbia Business School and former chief executive of Sears Canada, The Washington Post reported. ''They've lost half of their market share in the last 14 years, and vendors aren't seeing much value in the relationship anymore.''

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