Amazon Helps Out An Old Foe

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What's going on?

Amazon is making a move into selling large home appliances (tweet this) and Sears, formerly Americas largest retailer, is getting a potential lifeline in the process

What does this mean?

Sears will start selling its Kenmore home products, like fridges and stoves, on Amazon and link some of its products to Amazons Alexa meaning you could turn down your Kenmore air conditioner without leaving your couch. More broadly, this is a significant move for Amazon into big-ticket home appliances an area that it has hitherto not focused on. You can see how this could hurt home retailers like Home Depot and Lowes, who saw their stocks fall about 5% on Thursday.


For Sears, which has suffered years of sales declines, this is part of a turnaround strategy: its hoping that selling goods on Amazon will give it customers it wouldnt otherwise have.

Why should I care?

The bigger picture: If you cant beat em, join em?

Various retailers have teamed up with Amazon recently. Nike just agreed to sell its products to Amazon for the first time, Whole Foods sold itself to the ecommerce giant and now Sears is joining forces. Doing so may give Sears a sales lift and, perhaps more importantly, give it a better entry point than rivals into the burgeoning market for smart home appliances. But its also making itself very reliant on Amazon. With Sears stock up about 15% on Thursday, investors appear to like that more than the alternative.


For markets: FAANG stocks have been on fire lately.

FAANG stands for Facebook, Amazon, Apple, Netflix and Alphabets Google, which are some of the biggest and fastest growing tech companies in the world. Those stocks have performed better than overall US stocks by about 25% so far this year, including substantial gains recently (Amazon is up about 6% this month alone). The primary appeal comes from their growth which, in turn, comes from their innovative technology both of which are rare commodities among large public companies today.

Originally posted as part of the Finimize daily email.

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