J.C. Penney, Sears battle it out for appliance sales

Dive Brief:

There's an appliance price war raging between department store retailers J.C. Penney and Sears, as J.C. Penney seeks to regain market share and hit Sears in one of its few strong sides.
Jefferies retail analyst Randal Konik said in a research note Monday that J.C. Penney is offering up to 20% discounts on some appliances, special financing for 18 or 24 months, price-matching, and free delivery and installation on purchases over $299, according to Fortune.
Konik also noted that Sears has countered with 30% off appliances, special financing for a year and free delivery on orders over $399.

Dive Insight:

J.C. Penney announced in January that it was expanding its pilot effort to sell major appliances after a nearly 33 year hiatus in the space. The move is one of the first implemented by new CEO Marvin Ellison, who was brought on to help the struggling retailer recover from a series of failures under CEO Ron Johnson that alienated its core customers and sent the business into years of free fall.

J.C. Penney has seen some success under Ellison so far, reporting Q4 revenue that beat expectations in February and a rise in same-store sales during the time.

Starting this month through the fall, J.C. Penney will introduce major appliances to new stores every week until nearly half of its 1,000 locations offer kitchen and laundry appliances from Samsung, LG, GE Appliances and Hotpoint. By later in the summer, customers nationwide also will be able to purchase the products online.

With the large expansion, Ellison is challenging his former employer Home Depot as well as Sears with the decision to sell major appliances, a department that brings in about $4 billion a year for Sears.

Sears is struggling mightily to recover from quarter after quarter of dismal sales results, including an 8.3% sales decline to $5.39 billion in the first quarter. Sears Holdings CEO and chairman Edward S. Lampert in May said that Kmart and Sears continue to struggle in a “heavily promotional competitive environment.”

Lampert detailed ways the company plans to combat these woes, which includes zeroing in on its Shop Your Way membership program, its high-performing stores, and the strength of some of its key brands.

Sears will also “aggressively evaluate all of the potential alternatives available to” its Kenmore appliances, Craftsman and DieHard and Sears Home Services businesses, a move that many observers have suggested for years. Sears’s Craftsman and Kenmore brands in particular still outpace many other comparable brands in name recognition and consumer trust, and could survive nicely outside of the Sears brand itself.

J.C. Penney's moves are not confined to appliances, though. The retailer this spring also said that it’s expanding its window-covering sales by allocating another 25% of floor space to curtains, blinds, shades, and decorate hardware: Before the recent recession, J.C. Penney was helping a third of U.S. households to dress their windows, according to the Dallas Morning News. J.C. Penney is also boosting some furniture offerings in partnership with furniture company Ashley and will sell flooring through a partnership with carpet and flooring company Empire Today.