Sears Holdings (SHLD) said on Thursday it has begun selling jump starters, battery chargers, and maintainers under its DieHard brand on Amazon.com (AMZN), its latest move to squeeze out whatever value it can from its once dominant brands while its retail business continues to free fall.
The DieHard move comes a few months after the troubled retailer began selling its line of Kenmore appliances on Amazon and announced their integration with Amazon Alexa. In July, when that news was announced, Sears shares jumped 19%. In contrast, the DieHard news gave the stock no lift on Thursday, likely given that the previous effort has not slowed the precipitous declines in sales at Sears. (Sears Holdings also operates the Kmart discount chain.) Sears shares, flat in Thursday trading, are 72% below a 52-week high, giving the one-time retail behemoth a stock market value of only $430 million.
Comparable sales, a measure that strips out the impact of stores closed in the last years, fell 17% at Sears and 13% at Kmart, in the company’s most recent quarter, far steeper drops than those in preceding periods and worrisome at a time of high consumer confidence and increased spending. The DieHard partnership with Amazon is one of many moves in the last two years by Sears to diversify its revenue sources and generate urgently needed cash, as the sales tailspin drains Sears’ coffers. (Earlier this week, the company announced it had extended the terms of a $400 million loan to 2019 and also is planning to secure additional borrowing to cover upcoming pension payments.)
“Launching on Amazon.com will significantly expand the distribution and availability of the DieHard brand in the U.S., building on the success of our recent Kenmore appliances launch on Amazon.com,” Tom Park, the president of Sears’ Kenmore, Craftsman and DieHard brands, said in a statement.
Sears is not the only traditional retailer to be deepening its partnerships with Amazon. Kohl’s for one is testing out handling returns for Amazon purchase at a few dozen of its stores in Los Angeles and Chicago. (But Kohl’s comparable sales in contrast to Sears, are actually rising, however slightly. And it is not selling its own brands on Amazon.) But given how many assets Sears has sold off in the last few years to stave off a cash crunch, from Lands’ End to Craftsmen, it’s easy to see this as a reflection of the prospects for Sears’ own stores.
The company has closed hundreds of Kmart and Sears locations in recent years, betting it can be viable with fewer and smaller stores. There is merit to that approach, but Sears’ core business continues to crumble despite such efforts.
Sears will expand its DieHard partnership with Amazon next year to include tires and batteries. At the same time, it’s has begun to open DieHard Auto Centers, a smaller format store focused on a more limited product category, a strategy it is following for smaller locations focused on mattresses and appliances.