Wards calls it quits
January 1, 2001-- Home Textiles Today,
CHICAGO -After two years of trying to turn around the venerable Montgomery Ward, its end was announced late last week.
The retailer, a GE Capital-owned company since it emerged from its first foray into Chapter 11 in July 1997, said it filed a voluntary petition for release under Chapter 11 in the District of Delaware.
Wards, a major player in home textiles, ranked 14 on Home Textiles Today's Top 50 Retail Giants survey in 1999 with estimated revenues in home textiles of $215.9 million.
Said Roger Goddu, president and ceo since January 1997, the filing "comes after an exhaustive exploration of options for continuing the business. Overall weak holiday sales and a very difficult retail environment simply didn't permit us to complete the turnaround that might have been possible in any other economic situation."
The company immediately eliminated 450 jobs in the corporate office here, plans staff reductions over the first and second quarters of 2001, and over the next several months will close its 250 stores and 10 distribution centers.
It also previously suspended unpaid vendor deliveries.
Montgomery Ward began in 1872 as the first mail order catalog in the U. S. and opened its first retail store in 1926. Its catalog was discontinued in 1985, and it began a specialty catalog venture in June 1991. It entered a joint venture with Fingerhut, a Minneapolis-based direct marketer, to market Montgomery Ward Direct, which ended in early 1996 when Fingerhut sold its stake to Value Vision. In July 1996, Value Vision bought out the Montgomery Ward stake as well.
The company bought Lechmere, a retail chain specializing in appliances and consumer electronics, and in August 1996 launched HomeImage by Lechmere, a six-unit conversion of Lechmere stores designed to appeal to a higher-income customer and stocked with lines not available at the parent company. That effort also was discontinued.
Wards had a troubled history, going back to the post-World War II era when its then-chairman Sowell Avery refused to follow customers to the suburbs. It merged with Container Corp. of America in 1968, had a majority interest acquired by Mobil Oil and was totally acquired by Mobil two years later. Bernard Brennan, a Sears executive, joined the company and headed it until January 1997, when Goddu took over.
When Wards filed for Chapter 11 in July 1997, it closed the Lechmere stores, HomeImage by Lechmere, and Electric Avenue & More, an 11-unit chain dedicated to furniture, bedding, appliances, and electronics.
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