Whirlpool is usually telling its side of the story, as the appliance maker cuts a century-old partnership with Sears Holdings.
“We informed Sears in May we would certainly no longer supply Whirlpool brand products [if] we could not reach terms which were acceptable to both parties,” Whirlpool Chief Executive Marc Bitzer said on a call Tuesday morning with analysts along with investors.
“The entire Sears business declined over time,” Bitzer added. Overall, he said Sears only accounts for about 3 percent of Whirlpool’s global business — a “little fraction” when compared to additional sources of revenue.
A representative coming from Sears didn’t immediately respond to CNBC’s request for comment regarding the conference call.
Bitzer confirmed which Whirlpool would certainly continue to manufacture some Kenmore-branded products for Sears, as the idea has been doing for years.
In an internal memo to its employees, Sears cited a dispute over pricing as its reason for cutting ties with Whirlpool.
“Whirlpool has sought to use its dominant position inside marketplace to make demands which would certainly have prohibited us coming from offering Whirlpool products to our members at a reasonable cost,” Sears wrote.
On Monday evening, Whirlpool reported third-quarter profits along with revenue which missed analysts estimates. The Michigan-based appliance maker cited higher raw material prices in its earnings report along with warned which those costs are anticipated to rise through 2018.
Whirlpool shares were falling more 10 percent Tuesday morning.
Bank of America along with RBC Capital Markets both reacted by downgrading the stock.
“We are … not satisfied with our operating margins, which were impacted by raw material inflation, unfavorable cost/mix along with slow progress on our European integration,” Bitzer added in a statement.
“Thus, we are implementing strong actions to deliver our long-term goals, including recently-announced global cost-based cost increases along using a fixed cost reduction initiative,” he said.
Over time, the market for appliances has become increasingly competitive, with players ranging coming from J.C. Penney to Best Buy to Amazon itching for a share.
Once recognized as the go-to destination for dishwashers along with refrigerators, Sears gave up an estimated $1 billion in major appliance sales in 2015, according to analysis by Twice along with The Stevenson Co. More recent data wasn’t immediately available.