Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Sears Holdings Corp Were Flying Higher Today

By Jeremy Bowman - Updated May 9, 2018 at 5:05PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Sears' stock popped as it announced another step in its partnership with Amazon.

What happened

Shares of Sears Holdings Corp (SHLDQ) were soaring today after the struggling retailer said it would team up with Amazon (AMZN -5.14%) to sell and install tires. Sears said its Auto Centers would provide full-service tire installation and balancing for tires ordered on Amazon.com. As a result, the stock closed up 15.9%. 

The interior of a Sears store.

Image source: Sears.

So what

The move is the latest iteration of a partnership that began with Amazon last July when Sears said it would sell Alexa-enabled Kenmore appliances on Amazon's website. Now, Sears says it will become the first nationwide auto service center to offer ship-to-store service for tire installation from Amazon, and it will also sell DieHard tires on Amazon, similar to the Kenmore deal.

Sears will initially launch the program at 47 of its auto centers and is planning to ramp it up soon after to the more than 400 auto centers it has across the country.

Now what 

The deal itself is unlikely to have a material impact on Sears' financial results as auto centers represent a small portion of its business, and the move won't do anything to prop up the fast-declining retail business. However, investors are desperate for good news out of Sears, and any opportunity it has to tie its fortunes to Amazon sounds promising. Some investors are hopeful that Amazon could even acquire Sears, but I think that's highly unlikely considering many of Sears' stores are decrepit and the brand has little value these days.

However, the partnership between the two companies could be extended in other ways, or Amazon could eventually buy one of Sears' product brands like Kenmore or DieHard. That prospect alone is not enough to stop Sears' spiraling financial performance, though.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Sears Holdings Corporation Stock Quote
Sears Holdings Corporation
SHLDQ
Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$107.40 (-5.14%) $-5.82

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
332%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.