Shares of Sears Holdings Corp. continued to slide Wednesday, a day after it was disclosed that the 100-year-old partnership between the retailer and Whirlpool for branded products has come to an end.
The appliance category is a key one for the retailer, and its decision was not well received by investors, many of whom already feel that a lackluster holiday season could be one that breaks the camel’s back for the struggling chain. Shares of Sears were down 3.8 percent to close at $5.76 in Nasdaq trading. That’s on top of the 8.7 percent drop Tuesday following disclosure of the partnership’s end, which saw the shares close at $5.99.
Sears sent a note to store associates last week that said the decision was “effective immediately,” and includes those of Whirlpool’s subsidiaries Maytag, KitchenAid and Jenn-Air. Sears said it would continue to sell what’s left in its inventory, and that store associates should continue to sell the retailer’s house brand, Kenmore. Whirlpool will continue to be the supplier of some Kenmore-branded products to Sears. Other brands available at the chain are the LG, Samsung, GE, Frigidaire, Electrolux and Bosch.
Sears said in the note it is always working to “provide value to our members,” and explained that Whirlpool’s push to raise prices prohibited Sears from selling the products “at a reasonable price.”
Whirlpool Corp.’s chief executive officer Marc Robert Bitzer, said on an earnings conference call to Wall Street Tuesday morning that his firm told “Sears in May that we would no longer supply Whirlpool branded products as we simply could not reach terms that were acceptable to both parties.”
Bitzer also told analysts the “entire Sears business has declined over time and now represent about 3 percent of our global business, of which the branded portion is only a small fraction.” Without going into the specifics of why the parties could not come to any agreement, Bitzer did tell analysts that the price increase Whirlpool was seeking was to enable it to “fully recover raw material cost increases over two years.”