Nearly dead Sears won't sell Whirlpool appliances anymore; brands split after 100 years

[Leroy N. Soetoro]

http://www.chicagotribune.com/business/ct-sears-whirlpool-appliances-
20171024-story.html

After a centurylong history together, Sears Holdings Corp. will stop sales
of Whirlpool products after the companies couldn't agree on pricing terms.

The retailer will no longer carry Whirlpool brands, including Maytag,
KitchenAid and Jenn-Air, effective immediately, Sears said in an employee
memo last week that was provided to Bloomberg Tuesday.

"Whirlpool has sought to use its dominant position in the marketplace to
make demands that would have prohibited us from offering Whirlpool
products to our members at a reasonable price," Sears said in the memo.
The department-store chain will continue to sell Whirlpool products only
until all its current inventory is depleted.

Whirlpool informed Hoffman Estates-based Sears in May of its decision to
stop providing products, Chief Executive Officer Marc Bitzer said Tuesday
on an earnings conference call. Sears represents about 3 percent of global
revenue for Whirlpool, which is in the process of shipping its inventory
to other vendors.

"In terms of the impact of shifting that, to be honest it's not a whole
lot," Bitzer said. He declined to give details on why the companies
couldn't come to terms.

Whirlpool is raising its prices to cover higher costs for raw materials.
The company's shares fell as much as 11 percent to $163 in New York
Tuesday, a day after cutting its earnings forecast and posting quarterly
results that missed analysts' projections. The stock move was its biggest
intraday decline in a year.

Sears shares fell as much as 1.5 percent to $6.46.

Whirlpool will continue to supply about 10 branded products to the
retailer, Bitzer said.

The manufacturer expects earnings of $13.60 to $13.90 a share this year,
down from a previous forecast of as much as $15. Third-quarter results
also fell short of Wall Street's predictions.

The outlook renews concerns that Whirlpool can't keep its costs in check,
especially as the company struggles to integrate Italy's Indesit business.
Appliance shoppers also have been gravitating toward lower-end machines,
hurting Whirlpool's price mix. In a bid to get back on track, Whirlpool is
reducing expenses by $150 million — on top of existing cost-cutting
efforts.

Whirlpool, then operating as Upton Machine Company, sold its first washers
to Sears in 1916, according to the manufacturer's website. Five years
later, Sears loaned Upton $87,500 to expand its washer factory, eventually
converting that to a stake in Upton. To feed growing demand at the
retailer, Upton merged with another washer maker in 1929.

For years, Whirlpool manufactured appliances under the Kenmore name, then
sold exclusively at Sears. The retailer announced earlier this year that
it would begin selling its Kenmore appliances through Amazon.com.


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