JCPenney is getting back into the appliance business — and that’s terrible news for Sears.
Home Depot alumnus and CEO Marvin Ellison is leading an effort for the retailer to start selling washers and stoves for the first time in 30 years, reports Suzanne Kapner at The Wall Street Journal.
Ellison discovered that appliances were a top item customers searched for on JCPenney’s website. The retailer will sell about 150 kitchen and laundry appliances at a test of 22 stores.
Department store Macy’s is also doing a similar test through a partnership with Best Buy.
Competitors getting into one of Sears’ key business could be terrible news for the company, which is already facing declining sales, bleeding cash, and diminished market share.
The retailer’s appliance business is its most successful venture, with a 26% share of US sales. Still, that has fallen from a 33% share in 2006.
If JCPenney’s appliance program test is successful, it could give customers who frequent both chains one less reason to go to Sears.
It’s a blow Sears might not be able to handle.
Many experts believe Sears is beyond the point of returning to its post as a major US retailer. In fact, it’s in danger of not existing at all.
“Sears is like a rudderless ship, devoid of compass heading, manned by a demoralized crew and worth nothing more than the old rotten boards and nails it’s made of,” Doug Stephens, founder of industry website Retail Prophet and author of “The Retail Revival: Re-Imagining Business for the New Age of Consumerism,” told Business Insider in December.
It’s an ugly time in big box retail.
Walmart and Macy’s are shutting hundreds of stores, and experts think more closures will follow.
Analysts at RBC Capital Markets believe that this is part of a larger trend in retail, as more customers shop online instead of in stores.
“Macy’s announced store closings could have a number of implications on the overall retail landscape,” the analysts write. “We believe Macy’s decision will catalyze other specialty retailers and department stores to take a harder look at their boxes in these underperforming centres.”
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