Bloomingdale’s wants to sell fridges and TVs
Bloomingdale’s thinks you might want a dishwasher or a new fridge with your designer bag this holiday.
The high-end department store announced a partnership with LG for a dedicated appliance section at its flagship in Manhattan.
Beginning next week, the store will sell a premium version of LG TVs, refrigerators, ovens, dishwashers and washer-dryers. It’s the first time that Bloomingdale’s, owned by Macy’s (M), will offer major appliances or TVs.
Bloomingdale’s is following a well-worn retail path into the appliance business.
Best Buy (BBY), Home Depot (HD), and Lowe’s (LOW) have increased their selection in recent years to capitalize on the collapse of Sears, which once dominated the appliance game, and grow their big-ticket sales.
The strategy has worked well for Best Buy. Appliances now account for about 10% of its overall business, and sales have been growing for seven straight years.
Department store peer JCPenney (JCP) also saw an opportunity to start selling appliances in 2016 under former CEO Marvin Ellison, a home improvement veteran who now runs Lowe’s. Penney now has appliance showrooms at more than 600 stores.
Bloomingdale’s is not trying to take advantage of the market Sears left behind, though. Macy’s CEO Jeff Gennette said on Wednesday that the company has “very little customer overlap with Sears.”
Instead, Bloomingdale’s is trying expand its home furnishing assortment starting in one store. If the test works, Bloomingdale’s may roll it out to more stores.
The plan drew mixed reaction on Wednesday.
Christina Boni, an analyst at Moody’s, said Bloomingdale’s new LG store-within-a store will “provide a unique presentation when combined with its existing home offerings.”
But Tim Barrett from Euromonitor doubts that the average Bloomingdale’s shopper would think to go to the store for appliances.
He is skeptical that the initiative will drive new customers.
“Those that have been proactively executing this strategy for years are most likely to reap the benefits, not retailers that are just reacting to failures as they occur.”
Mark Cohen, director of retail studies at the Columbia Business School, put it another way.
“Bloomingdale’s entering the major appliance business makes absolutely no sense,” he said. Cohen believes the company doesn’t have the expertise or the experience necessary to make money in the complex world of selling appliances.