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Sears, once an appliance powerhouse, sees sales shrink despite growing demand

Lauren Zumbach, Chicago Tribune on

Published in Business News

CHICAGO -- After a quarter century with the same countertops and cabinets in their Glen Ellyn home, the Cook family decided it was time for a change.

Many changes, actually -- among them a full lineup of new appliances.

"This is the first stop, but it won't be the only one," said Tracey Cook, 49, while her family browsed last month at a Lowe's in Carol Stream.

In years past, Sears would likely have been the first stop for families like the Cooks. The chain -- aided by its trusted Kenmore brand -- long dominated sales of appliances like refrigerators, ranges, washers and dryers. But at a time when major appliances are seeing rapid sales growth and reliably drawing shoppers into bricks-and-mortar stores, the struggling retailer's hold on the category has slipped.

Big-box specialty chains like Home Depot, Lowe's and Best Buy have been winning over consumers, and even J.C. Penney is bringing major appliances back to stores in a bid to win sales from its department store rival and frequent mall neighbor.

But Dean Schwartz, who oversees Sears' appliances business as president of hardlines, said the company isn't shrinking quietly.

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"We have to make sure we're doing things to understand why we're not (on top) and either get back or protect where we are," Schwartz said.

Demographic trends are behind the growing sales of major appliances. Millennials are reaching ages where they're buying their first homes, while older generations are becoming empty nesters or retiring, changes often accompanied by a switch to a smaller home, a long-distance move or a remodel.

"The number of bodies hitting these key life moments is growing," said Joe Derochowski, home industry analyst with The NPD Group.

Even better, from a retailer's perspective: higher-end models are doing particularly well in a category that usually has thin profit margins, said Bob Hoyler, a research analyst at Euromonitor. Spending on major consumer appliances in the U.S. rose 46 percent between 2012 and 2017 -- well ahead of the 26 percent rise in the number of appliances purchased, according to Euromonitor.

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