When a 101-year-old marriage is ended, everyone wants to find out what happened and then figure out which party gets the blame. That’s what’s happening with reports of a split between Sears Holdings Corp. (NASDAQ: SHLD) and Whirlpool Corp. (NYSE: WHR).
According to an internal Sears memo, the struggling retailer will no longer carry Whirlpool brands at its Sears or Kmart stores. That includes Maytag, KitchenAid and Jenn-Air brands, all made by Whirlpool. Sears will continue to sell these branded products until current stock is gone.
The memo attributed the decision to Whirlpool’s price demands:
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.
Whirlpool CEO Marc Bitzer said that Sears accounts for about 3% of Whirlpool sales and that the impact of the change to the brand business is “not a whole lot.” Sears will continue to supply about 10 branded products to Sears. Some of the retailer’s Kenmore brand appliances are made by Whirlpool, as well as other well-known appliance makers.
Speculation that Whirlpool was concerned about Sears ability to pay for Whirlpool’s products was unfounded, according to a report in The Wall Street Journal. Earlier this year Sears sued two suppliers of its Craftsman tools to ensure continued delivery of the tools to the company’s stores.
Neither Sears nor Whirlpool offered any details of the pricing issues.
Whirlpool’s stock price dived more than 10% Tuesday morning following a weak third-quarter report and a weaker outlook. Full-year EPS guidance has been cut from around $15 to a range of $13.60 to $13.90 as the appliance maker struggles to rein in costs.
Shares traded down 9.7% at $164.84 Tuesday morning, in a 52-week range of $145.91 to $202.99. The stock’s 12-month price target was $203.11 before results were reported this morning.
Sears stock traded down about 1.5%, at $6.46 in a 52-week range of $5.48 to $14.32. The 12-month price target on the shares is $4.00.