(Bloomberg)—Sears Holdings Corp. has agreed to sell its Kenmore appliances on Amazon.com. The announcement Thursday kicked off Sears’ biggest stock rally in two months, a reassuring sign for a retailer that’s been rattled by e-commerce upheaval.
In addition to offering the Kenmore lineup on Amazon’s site, Sears will integrate its smart appliances with Alexa—the tech giant’s speech-activated assistant. That means the company’s air conditioners and other devices will respond to voice commands.
The announcement brings fresh hope that Sears, No. 19 in the Internet Retailer 2017 Top 500, can adapt to a rapidly shifting retail landscape. Department-store chains have been hard hit by sluggish mall traffic and online shopping. By teaming up with Amazon, Sears brings new life to its more-than-century-old Kenmore name and opens up a new sales channel.
“The launch of Kenmore products on Amazon.com will significantly expand the distribution and availability of the Kenmore brand in the U.S.,” Sears CEO Eddie Lampert said in a statement.
The Amazon deal sent Sears’s shares up as much as 24% to $10.76, the biggest intraday gain since May 25. The stock had been down 6.6% this year through Wednesday’s close. Amazon is No. 1 i the Top 500.
Shares of rival appliance sellers got hammered. Home Depot Inc. (No. 7) , Lowe’s Cos. (No. 25) and Best Buy Co. (No. 9) all fell at least 4% Thursday, underscoring concerns that shoppers will start buying more large appliances on Amazon.
Terms of the partnership weren’t disclosed, and it’s unclear how much of a boost Sears will get from the arrangement. But the company is badly in need of growth. Once the world’s largest retail chain, Sears has racked up more than $10 billion in losses over the past six years.
According to data from market research firm NPD Group, online shoppers spent $4.0 billion on home appliances last year, up 38% from $2.9 billion in 2015.
Greg Portell, retail practice lead at management consulting firm A.T. Kearney, says that selling on Amazon is going to be help Sears get the most value out of Kenmore.
“They’re able to monetize the Kenmore brand without losing control,” he says. “In the past, they’ve divested brands because they weren’t able to nurture them or get the proper value out of them internally. But in this case, they’re using the brand differently as an asset, because it clearly has a value that stretches beyond simply being an appliance.”
Canadian default
In another blow, Sears Canada Inc.—partially spun off from Sears Holdings in 2012—went to court in June to seek protection from creditors.
Sears’s flagship chain also has voiced concerns about its outlook this year. The company added so-called going-concern language to its annual report filing in March, acknowledging there was “substantial doubt” about its future. The move sent the stock on its biggest decline in more than two years.
Lampert, a hedge fund manager who serves both as Sears’s CEO and its largest investor, has used his own money to help keep the business afloat. Earlier this week, his investment firm agreed to lend Sears an additional $200 million.
Sears had said last year it was seeking a buyer for its Kenmore name, along with the DieHard battery and Craftsman tool brands. It sold Craftsman to Stanley Black & Decker Inc. this year for about $900 million, but the other two brands remain part of Sears.
The Kenmore name first appeared on a sewing machine in 1913, then expanded to washing machines in 1927. The lineup later grew to encompass everything from microwaves to the Lady Kenmore electric shaver.
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