Investors sure like the idea that Sears (shld) is looking beyond its struggling retail business to drum up new sources of revenue and places to sell products under its own brands.
The retailer said on Wednesday it would offer full-service installation for tires ordered on Amazon.com (amzn), including its own DieHard brand. Customers can order tires on Amazon and then have them shipped to a Sears Auto Center where they can be installed when they bring in their car. Last year, Amazon started selling Sears’ Kenmore brand of appliances such as ovens and washing machines as well as DieHard car batteries.
The new partnership news sent Sears’ battered shares (shld) up 15% in late morning trading.
The move is the latest pragmatic concession by a large traditional retailer to the reality of Amazon’s strength in retail now: last month Best Buy (bby) announced a deal to sell sell televisions that run on Amazon’s new Fire TV operating system, while Kohl’s (kss) has been testing handling returns for Amazon and selling its gadgets in its stores. Bloomberg News reported that the move has led to a surge in shopper visits to Kohl’s stores. Both Best Buy and Kohl’s were among retail’s best performers on a sales growth basis during the holiday season.
All these collaborations also help Amazon which does not have a national network of stores to serve customers when they need in-person services.
The tire installation service is 47 Sears Auto Centers in eight markets, including Chicago, Dallas, and New York and will eventually roll it out to all 400 of its auto centers nationwide in the coming weeks.
As for Sears, its crumbling sales have led it to look for new avenues of revenue. Last year, combined comparable sales at its Kmart and Sears chains fell 13.5% despite the closing of dozens of its weakest stores. Sears CEO and top shareholder Eddie Lampert conceded in a blog coinciding with the company’s annual shareholder meetings on Wednesday that, “We’re still not where we need to be, and Sears continues to face significant challenges in a tough retail environment.”
Lampert recently made a proposal to buy some of Sears’ most attractive assets such as its home improvement business, its Kenmore appliance brand, and some of its real estate. Sears has been trying to sell those assets for some time but to no avail. The company has in recent years sold off a number of key assets to protect its liquidity amid steep sales declines.