This relationship makes Sears an approved Trane dealer, providing Sears customers with a wider selection of HVAC products, in addition to its exclusive Kenmore and Kenmore SmartSystems brands. The relationship also establishes Sears as the largest home-improvement provider to serve as a Trane dealer and provides Trane additional distribution of its premium brand.
One industry observer, who requested anonymity, said Sears sells about 50,000 air conditioning units and 50,000 furnaces a year, with total HVAC sales of $250 million annually.
"Consumers have told us they want a choice of premium brands and a high-quality service provider, and this relationship delivers on both fronts to help make Sears the single source for every homeowner's HVAC needs," said Daniel DeMeo, president of HVAC Services for Sears. "Trane has the highest top-of-mind brand awareness among consumers of any heating and air conditioning manufacturer."
Sears CEO Arthur Martinez has consistently said he'd like to double or triple the $3 billion volume of Sears HomeCentral, which includes HVAC and appliance installation and repair.
Sears estimates the total home services market at more than $170 billion.
In its 1998 annual report, Sears states: "We had very aggressive plans, which we did not achieve in 1998, due in part to a disappointing performance in our home-improvements business. However, many of our businesses increased nicely. We had very good performance in our service contracts business, where our profitability improved markedly. We had solid performance in product services, with increases in service calls, market share and revenue, and we drove improvements in the heating and air conditioning business."
The company believes that home service is a natural fit because it is the biggest hard-goods retailer in the country.
"We are excited about Sears HomeCentral becoming a national Trane dealer," said Dale Green, Trane Unitary Product Group vice president/sales and marketing. "Both companies share a commitment and dedication to complete customer satisfaction. This relationship will be good for Sears and for Trane and for our current partners, since existing distributors will act as suppliers for the large Sears network."
DeMeo added: "Consumers have told us they want one company for all their HVAC needs. Our new relationship with Trane complements our Kenmore product line, providing consumers with a broader choice from Sears. The fact is, more than 80% of consumers purchase their heating and central air conditioning equipment from a company that offers more than a single brand."
The Kenmore line has been manufactured for decades by International Comfort Products, now a division of Carrier Corp., since the days when ICP was called Heil-Quaker Corp. Carrier Corp. declined comment on the Sears-Trane alliance.
Sears and Trane said the deal would result in cross-selling opportunities for both companies. Trane will leverage Sears' marketing muscle, with direct access to 50 million Americans each week through Sears newspaper inserts, plus the ability to market to 90 million Sears customers. Sears will receive the benefits of being an approved Trane dealer and will participate in local Trane marketing and advertising efforts.
Sears said that customers who purchase Trane equipment through Sears HomeCentral would get what it calls "the full Sears purchasing experience." That includes Sears credit programs; the "Satisfaction Guaranteed or Your Money Back'' pledge; service from 15,000 technicians; and access to 5,000 customer service representatives 24 hours a day, seven days a week.