Sears Holdings Corp. (SHLD) announced a tire service collaboration with Amazon.com Inc. (AMZN), as a part of its efforts to become profitable. Sears shares jumped nearly 16 percent on Wednesday following the announcement.
The Hoffman Estates, Illinois-based company will install tires sold by the e-commerce giant at its U.S. auto centers, according to the terms of partnership. Sear’s CEO Edward Lampert said the company is attempting to target a new customer base with the help of this tie-up.
Sears has faced years of falling sales amid increasing pressure from the retail giants such as Walmart and Amazon. Under the supervision of Lampert, the company has shut unprofitable outlets, limit expenses, sold assets and tried to build partnerships for its products. As of Feb. 2018, the company operated 1,002 stores, well below 2,019 stores in 2012. However, those efforts haven’t really paid off so far.
Lampert owns 30 percent shares in Sears, biggest stakes among all shareholders.
Founder of research firm Retail Metrics, Ken Perkins said the collaboration between the two companies is positive for Sears’ auto centers, but is unlikely to significantly change the overall declining profit and revenue picture at the company’s stores.
The latest collaboration with Amazon will help Sears to increase its DieHard products available on Amazon. The company will start selling its DieHard tires on Amazon from now on. It already sells its Kenmore home appliances on the online platform.
Sears will launch the tire service in its auto centers located across the U.S. during the next two weeks.
Seattle, Washington-based Amazon has inked similar deals with physical chains to sell its products as well as use the retail outlets of those chains for picking up online orders. For instance, Amazon partnered with Best Buy last month to sell its smart TVs, while giving Best Buy exclusive rights to sell those devices.