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Sears-Whirlpool curtail relationship after 100 years

Sears will no longer sell Whirlpool-branded appliances, curtailing a business relationship that dates back more than 100 years.
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Sears will no longer sell Whirlpool-branded appliances, curtailing a business relationship that dates back more than 100 years.

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

Sears has been ravaged by new competition for years, from stores like Home Depot and also from Amazon.com and other online retailers. It’s been closing stores as competitors take a bigger slice of the territory it dominated for decades. In the U.S., consumers buy most of their small appliances, from Walmart, according to market research firm TraQline. Amazon comes in second, with Sears placing fourth behind Target.

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

Sears said that it would sell off the remainder of its Whirlpool inventory. 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 Tuesday that the company told Sears in May that it would no longer supply branded products because it could not reach terms that were “acceptable to both parties.” He said Whirlpool will continue to supply the Kenmore products it makes for Sears.

Bitzer also said the entire Sears business has declined over time and now accounts for only 3 per cent of Whirlpool’s global business, of which branded products are only a small fraction.

The relationship between the two companies reaches back to 1916, when Whirlpool began making two types of wringer washers for Sears, Roebuck and Co., according to Whirlpool’s website. At that time, Sears operated exclusively through mail order. The Hoffman Estates, Illinois-based company, now Sears Holdings Corp., also owns Kmart.

Shares of Whirlpool Corp., based in Benton Harbor, Michigan, tumbled more than 10 per cent, or $18.30, to $164.20, in midday trading. The company had cut its profit outlook late Monday, citing rising costs. Sears shares fell 5.8 per cent, or 38 cents, to $6.18 in midday trading.