Shares in Sears Holdings kicked off their biggest rally in almost two months after the company agreed to sell its Kenmore line on Amazon.com and integrate Amazon's virtual assistant Alexa into the appliances. That means the company's air conditioners and other devices will respond to voice commands.
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.
The announcement brings fresh hope that Sears 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.
Shares of rival appliance sellers got hammered. Home Depot, Lowe's and Best Buy Co. all fell at least 4% on Thursday, underscoring concerns that shoppers will start buying more large appliances on Amazon.
Sears's 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 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.
-- Bloomberg News