Sears Holding will cut its ties to Whirlpool and no longer sell its products, which include KitchenAid, Jenn-Air and Maytag subsidiaries, showed an internal memo at Sears that was sent last week to its stores.
Sears in the memo wrote that Whirlpool had sought to use its dominant marketplace position to make demands that would have prohibited Sears from offering their products at reasonable prices.
Sears announced that it is planning to sell products by Whirlpool in its locations until its inventory becomes depleted.
The chain of department stores added that it was providing instructions and tools to employees regarding how to handle excess inventory and move into Kenmore and other brands of appliances.
In premarket trading on Tuesday, shares of Whirlpool fell as much as 10%.
The appliance manufacturer based in Michigan posted on Monday earnings for the third quarter that were worse than had been expected, and cut its outlook.
The company said it was expected to now earn between $11.10 and $11.40 a share for the full year during 2017, which was down from its previous forecast of between $12.40 and $12.90.
Whirlpool’s CEO Marc Bitzer cited increasing costs of raw materials and an unfavorable price/mix as what has been weighing on margins at the company. Whirlpool will have its conference call for earnings Tuesday morning.
The first washing machine sold by Upton Machine Company, which would eventually become Whirlpool, to Sears was in 1916. Sears later bought a stake in the maker of appliances in 1921.
Sears said moving forward it would push the other brands it has for appliances which includes Samsung, LG, GE, Electrolux, Bosch and Frigidaire.
Earlier in 2017, CEO at Sears Eddie Lampert spoke out at retail vendors saying that the company would not just simply roll over and allow others to take advantage; we will instead do what is best to protect our company’s best interests and the millions of shareholders that we serve.
Sears sued two of its vendors of Craftsman in disputes over contracts. Both lawsuits have now been resolved.
Sears Holdings has gone through a very difficult period the last two to three years with declining sales that prompted it to close hundreds of locations of its namesake stores as well as many Kmart locations.
It has also sold off certain brands such as Craftsman tools amongst others.