Market Overview

Sears, Amazon Partner Up For Tire Delivery And Installations

Sears, Amazon Partner Up For Tire Delivery And Installations, Inc. (NASDAQ: AMZN)'s partnership with Sears Holdings Corp (NASDAQ: SHLD) started in 2017 with an agreement to sell Kenmore-branded appliances online. On Wednesday, the companies announced an extension of their relationship to now include tire delivery and installations.

What Happened

Amazon's customers will soon be able to buy tires online and have it shipped to a Sears Auto Center of their choosing, the companies said in a press release. As part of the buying experience, Amazon's customers will also be able to book a time and date for the tire installations.

Amazon will also begin selling Sears' DieHard All-Season tires after DieHard products including jump starters and battery chargers began selling in December.

Why It's Important

Shares of Monro Inc (NASDAQ: MNRO) initially fell more than 7 percent after the announcement. The automotive service company was reportedly in talks with Amazon to offer a tire installation service to Amazon's customers who made a purchase online.

It may be reasonable for investors and traders to conclude that the likelihood of a Monro tie-up with Amazon is now less likely given Sears' announcement. It should be noted, however, that the language in the press release doesn't suggest that Amazon's deal with Sears is exclusive.

Update, 1:06 p.m. ET: A source familiar with the deal told Benzinga the Sears' partnership isn't exclusive and Amazon is free to pursue similar arrangements with other tire service providers.

Jefferies analyst Bret Jordan told Benzinga he thinks Amazon will "expand to a broader installations partnership." He said the deal shouldn't cause a "huge" disruption in the tire service space; Amazon last year did about $500 million, or 2 percent of the $25 billion replacement tire market.

What's Next

Amazon's new agreement with Sears will be rolling out to U.S. customers in the coming weeks at 47 Sears Auto Centers in eight major cities. After the initial launch the service is expected to quickly expand throughout Sears Auto Centers' more than 400 locations.

Sears traded up more than 16 percent to $3.20 at time of publication.

Related Links:

Home Retailers Got Crushed After Sears Partners With Amazon

One Chart That Shows How Amazon Is Simplifying Sears' Appliance Purchase, Installation Process

Image credit: Phillip Pessar, Flickr

Posted-In: DieHard ecommerce Kenmore Sears Auto Center tiresNews Contracts Top Stories Best of Benzinga


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