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In the rough-and-tumble appliance business, Eddie Lampert is getting hung out to dry.
Since he merged Sears and Kmart in 2005, the reclusive hedge-fund billionaire has slashed costs at both chains — a strategy that has sent customers fleeing the retailer’s increasingly run-down stores.
Dirty, dilapidated shops have taken a steady toll on Sears’ most important sales category: big appliances such as refrigerators, washer-dryers, gas ranges and ovens.
Indeed, rivals Lowe’s and Home Depot are luring shoppers in search of appliances with newer, better maintained stores, according to industry watchers.
The latest evidence came this week, when Sears said a quarterly drop in appliance sales contributed to an 8.2-percent decline in comparable sales at its namesake stores.
The trend also took a toll on Sears’ bottom line. For the quarter ended Oct. 30, Sears said its loss nearly doubled to $218 million as revenue dropped 5 percent to $9.68 billion.
“These results again raise the question of why Kmart merged with Sears,” said Credit Suisse analyst Gary Balter. “The idea of combining the best of the two chains’ brands into one and selling off excess real estate has been a failure.”
Balter said that “while Kmart will continue to hobble along, Sears is saddled by its locations and by stronger competition in its space.”
While Sears said business was sluggish in October, Lowe’s and Home Depot earlier this week reported sharp profit increases, noting that comparable sales at their stores were up last month.
Lowe’s, in particular, has made steady gains in the appliance business as it courts female shoppers with brighter, cleaner stores, analysts say.
Last year, Lowe’s share of the US appliance market rose nearly 4 percent to $4.54 billion, or about a fifth of the total, according to This Week in Consumer Electronics.
Lowe’s appliance sales are benefiting from “a broader assortment” and “more new stores,” according to the trade magazine.
Although Sears is still the nation’s biggest seller of appliances, its share plunged 8.2 percent last year to $7.2 billion, or about 30 percent of the market, according to the trade magazine.
That’s sorely short of the 40-percent share of the appliance business Sears had less than a decade ago.
In the most recent quarter, Sears blamed “overall softness in the appliance market” as the government’s “cash for appliances” program ramps down.
Nevertheless, Sears also admitted that “a lower average selling price” hurt sales volume as the retailer staged discounts to prop up sputtering demand.
Kinks in the company’s supply chain also appeared to delay the arrival of new Kenmore appliances during the quarter.
Sears Holdings shares fell $2.50 or 3.78 percent to $63.70 yesterday in Nasdaq trading. Year-to-date, its stock is down 23.67 percent. james.covert@nypost.com