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Montgomery Ward

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Montgomery Ward
Company typePrivate —
Originally, department store
Currently, online retailer
and catalog merchant
IndustryRetail
Founded1872 (as department store, defunct 2001)
2004 (as online retailer)
HeadquartersOriginal company in Chicago, Illinois, United States
Current company in Cedar Rapids, Iowa, United States.
Key people
1872 founder, Aaron Montgomery Ward
David Milgrom, current president
ProductsClothing, footwear, bedding, furniture, jewelry, beauty products, appliances, housewares, tools, and electronics.
ParentDirect Marketing Services Incorporated
DivisionsWards Kids
Montgomery Ward Catalog
Websitewww.wards.com

Montgomery Ward (also known as Wards) is a company that currently operates as an online retailer. It is best known as a former American department store chain, founded as the world's first mail order business in 1872 by Aaron Montgomery Ward. At its height, it was one of the largest retailers in the United States, but declining sales in the late 20th century forced the original Montgomery Ward to declare bankruptcy and close all of its retail stores and catalog operations by early 2001.

After a near four year absence, the Montgomery Ward brand was revived as an online and catalog-based retailer headquartered in Cedar Rapids, Iowa, in late 2004, when Direct Marketing Services Inc. purchased much of the intellectual property assets of the former Wards. The current company has no retail stores.

History

Company origins

Ward had conceived of the revolutionary idea of a dry goods mail-order business in Chicago, Illinois, after several years of working as a traveling salesman among rural customers. He observed that rural customers often wanted "city" goods but were often victimized by monopolists who offered no guarantee of quality. Ward also believed that by eliminating intermediaries, he could cut costs and make a wide variety of goods available to rural customers, who could purchase goods by mail and pick them up at the nearest train station.

After several false starts, including the destruction of his first inventory by the Great Chicago Fire, Ward started his business at his first offices at the corner of North Clark and Kedzie streets, with two partners and using $1,600 they had raised in capital. The first catalog in August of 1872 consisted of an 8 by 12 in. single-sheet price list, showing 163 articles for sale with ordering instructions. Ward himself wrote the first catalog copy. His two partners left the following year, but he continued the struggling business and was joined by his future brother-in-law Richard Thorne.

In the first few years, the business was not well received by rural retailers, who considered Ward a threat and sometimes publicly burned his catalog. Despite the opposition, however, the business grew at a fast pace over the next several decades, fueled by demand primarily from rural customers who were attracted by the wide selection of items unavailable to them locally. Customers were also attracted by the innovative and unprecedented company policy of "satisfaction guaranteed or your money back", which Ward began using in 1875. Although Ward turned the copy writing over to department heads, he continued poring over every detail in the catalog for accuracy. Ward himself became widely popular among residents of Chicago, championing the causes of the common folk over the wealthy, most notably in his successful fight to establish parkland along Lake Michigan.

File:Pre-Wardslogo.gif
The last Montgomery Ward logo before the switch to Wards. This was used from 1992-1997.

In 1883, the company's catalog, which became popularly known as the "Wish Book", had grown to 240 pages and 10,000 items. In 1896, Wards acquired its first serious competition in the mail order business, when Richard Warren Sears introduced his first general catalog. In 1900, Wards had total sales of $8.7 million, compared to $10 million for Sears, Roebuck and Company, and the two companies were to struggle for dominance for much of the 20th century. By 1904, the company had grown such that three million catalogs, weighing 4 pounds each, were mailed to customers. [1]

In 1908, the company opened a 1.25 million ft² (116,000 m²) building stretching along nearly 1/4 mile of the Chicago River, north of downtown Chicago. The building, known as the Montgomery Ward & Co. Catalog House, served as the company headquarters until 1974, when the offices moved across the street to a new tower designed by Minoru Yamasaki. It was declared a National Historic Landmark in 1978 and a Chicago historic landmark in May of 2000. [2]

Expansion into retail outlets

File:Logo-mw.jpg
This logo was used by Montgomery Ward from 1968-82

Mr. Ward died in 1913, after 41 years running the catalog business. The company president, William C. Thorne (eldest son of the co-founder) died in 1917, and was succeeded by Robert J. Thorne. Robert Thorne retired in 1920 due to ill health.

In 1926, the company broke with its mail-order-only tradition when it opened its first retail outlet store in Plymouth, Indiana. It continued to operate its catalog business while pursuing an aggressive campaign to build retail outlets in the late-1920s. In 1928, two years after opening its first outlet, it had opened 244 stores. By 1929, it had more than doubled its number of outlets to 531. Its flagship retail store in Chicago was located on Michigan Avenue between Madison and Washington streets.

In 1930, the company turned down a merger offer from rival Sears. In 1939, as part of a Christmas promotional campaign, staff copywriter Robert L. May created the character and illustrated poem of Rudolph, the Red-Nosed Reindeer. Six million copies of the storybook were distributed in 1946. The song was popularized by Gene Autry.

File:Wards 2.jpg
Vacant Montgomery Ward store

After World War II, Montgomery Ward had become the third-largest department store chain. In 1946, the Grolier Club, a society of bibliophiles in New York City, exhibited the Wards catalog alongside Webster's dictionary as one of 100 American books chosen for their influence on life and culture of the people. The brand name of the store became embedded in the popular American consciousness and was often called by the nickname "Monkey Wards," both affectionately and derisively.

Downfall

In the 1950s, the company was slow to respond to general movement of the American middle class to suburbia. While its old rivals Sears, J.C. Penney, Macy's, and Dillard's established new anchor outlets in the growing number of suburban shopping malls, the top executives thought such moves as too expensive, sticking to their downtown and main street stores until the company had lost too much market share to compete with its rivals. Its catalog business had begun to slip by the 1960s. In 1968, it merged with Container Corporation of America to become Marcor Inc.

During the 1970s, the company continued to flounder. In 1976, it was acquired by Mobil Oil, which was flush with cash from the recent rise in oil prices. In 1985, the company closed its catalog business after 113 years and began an aggressive policy of renovation of the remaining stores. The renovations centered on restructuring many of the store layouts into boutique-like speciality stores. In 1988, the company management undertook a successful $3.8 million leveraged buyout, making Montgomery Ward a privately held company.

In 1987, it began a push into consumer electronics using the "Electric Avenue" name. Montgomery Ward greatly expanded their electronics presence by shifting from a predominantly private label mix to an assortment dominated by Sony, Toshiba, Hitachi, Panasonic, JVC, and other national brands. This strategy was led by V.P. Vic Sholis, who later became President of the Tandy Name Brand Retail Group. (McDuff, VideoConcepts, and Incredible Universe) Seemingly on the right track for a rebound in marketshare, in the late 1980s and early 1990s Montgomery Ward was one of the hottest retail chains in the country. 1994 brought a 94% increase in revenues, largely due to Ward's tremendously successful direct-marketing arms. For a short while Wards was also back in the mail-order business, through "Montgomery Ward Direct", a mail order business licensed to the catalog giant "Fingerhut". But by the mid 1990s sales margins were eroded even further in the competitive electronics and appliance hardlines, which traditionally were Ward's strongest lines.

File:3afe.jpg
The exterior of a typical Jefferson Ward discount department store

The company also spun off Jefferson Ward (known as "Jeffersons"), a short-lived discount department store version of Montgomery Ward which had the same concepts as most discount department stores. The chain was discontinued in 1988, and most locations were converted into Bradlees stores.

In 1994, it acquired the now-defunct New England retail chain Lechmere.

Bankruptcy

By the 1990s, however, even its old rivals had begun to lose ground to low-price competition from Kmart, Target, and especially Wal-Mart, which stripped away even more of Montgomery Ward's old customer base. In 1997, it filed for Chapter 11 bankruptcy, emerging from bankruptcy court protection in August of 1999 as a wholly owned subsidiary of GE Capital, by then its largest shareholder. As part of a last-ditch effort to remain competitive, the company closed 250 retail locations in 30 U.S. states, abandoned the speciality store strategy, and spent millions of dollars to renovate its remaining outlets to be flashier and more consumer-friendly. But GE reneged on promises of further financial support of Wards' restructuring plans.

In 1997, the chain was rebranded as "Wards", and began using this logo.

On December 28, 2000, the company, after lower-than-expected sales during the Christmas season, announced it was going out of business and would close its remaining 250 retail outlets and lay off its 37,000 employees. All the stores closed within weeks of the announcement. The subsequent liquidation was at the time the largest retail bankruptcy liquidation in U.S. history. Roger Goddu, Wards' CEO, was offered the CEO position of J.C. Penney. Goddu declined on pressure from GE. One of the last stores to close was the Salem, Oregon location in which the head of the Human Resources Division was located. By May of 2001 Montgomery Ward was gone.

Return

In June, 2004, an online retailer was created which sells the same products as the former brand. The company does not currently operate any retail stores. Key "Montgomery Ward" and "Wards" trademarks were purchased by Iowa-based direct marketing company Direct Marketing Services Inc., a catalog marketer, for an undisclosed amount of money.[1] DMSI then began operating under the same branding as the original company and managed to get it up and running in three months and started a new, smaller catalog. It is not the same company as the original, however.[2] As such, the new company does not honor obligations of the previous company, such as gift-cards and items sold with a lifetime guarantee.

It is expected that Wards will soon start selling clothing and shoes. A Spanish language version of their site was opened in early 2008. David Milgrom, president of the firm, said in an interview with the Associated Press: "We're rebuilding the brand, and we want to do it right." [3]

Former stores

Western United States

Western United States

Alaska

Arizona

  • Chris-Town Mall (now Christown Spectrum Mall) - now Ross Dress For Less and PetSmart
  • Desert Sky Mall - now Burlington Coat Factory
  • Maryvale Mall - later Malcom's, then Boston Store, now torn down
  • Paradise Valley Village - later Burlington Coat Factory, closed 2005, to be replaced by Wal-Mart Supercenter in 2007
  • Thomas Mall - mall torn down, Arcadia Crossing power center on site; new center included a newly built Montgomery Ward store which currently operates as Sears

California

Colorado

  • Lakeside Mall - now Avanza Supermarket
  • Southwest Plaza - demolished for replacement Dillard's store

Idaho

  • downtown - closed 1970s
  • Johnson Square - closed 1980s

Montana

Nevada

  • Las Vegas
  • Las Vegas - East

New Mexico

Oregon

  • downtown - moved to Rogue Valley Mall
  • Rogue Valley Mall - later Meier & Frank Home Store and Copeland Sports; Copeland Sports is now Sports Authority and Meier & Frank Home Store is now Macy's Home Store

Washington

  • Vancouver - downtown closed during 1960's
  • Yakima, Nob Hill Plaza - torn down

Wyoming

Eastern United States

Eastern United States

Alabama

Connecticut

Florida

  • Target shopping center across from Orange Park Mall - torn down for Target expansion and World Market
  • Now Orange County Sheriff's Department headquarters
  • (South) - now Orlando main office for Goodwill Industries
  • Dale Mabry at I-4-moved to Tampa Bay Center in the mid 1970s, demolished, now Wal-Mart and Best-Buy
  • East Lake Square- Office park now occupies buildings formerly housing stores including Wards
  • Floriland Mall-Moved to University Square to former Burdines. Now office park in same buildings formerly housing stores
  • Tampa Bay Center - demolished 2005. Now Tampa Bay Bucaneers training facility and parking for Raymond James Stadium
  • University Mall - now Burlington Coat Factory
  • Tallahassee, Tallahassee Mall - now Burlington Coat Factory

Georgia

Illinois

Indiana

Kentucky

Louisiana

Maryland

Michigan

New Hampshire

New Jersey

New York

North Carolina

Ohio

  • Downtown - closed 1963
  • Freestanding store - opened 1963/closed 1985

Pennsylvania

  • downtown - closed 1972 when Butler Mall store opened
  • Butler Mall - demolished for Wal-Mart

South Carolina

Tennessee

Vermont

Virginia

West Virginia

Wisconsin

Central United States

Central United States

Arkansas

Iowa

Kansas

Louisiana

Minnesota

Missouri

Nebraska

North Dakota

Oklahoma

  • Downtown
  • Central Mall - now Sears
  • Tulsa, Eastland Mall - vacant

South Dakota

Texas

  • Northtown Mall - mall is now an office complex
  • Prestonwood Town Center - later Mervyns; torn down
  • Red Bird Mall (now Southwest Center Mall)
  • Hulen Mall - now Sears
  • West 7th Street - Now major portion of Montgomery Plaza, condos and retail stores including Target
  • Greenspoint Mall - vacant
  • Gulfgate Mall
  • Memorial City Mall - torn down, rebuilt as Target
  • Northline Mall - boarded up
  • Sharpstown Center - now Burlington Coat Factory
  • Willowbrook Mall - later Foley's Men's & Home, now Macy's Men's & Home
  • Wonderland Shopping Center (now Crossroads Mall)
  • McCreless Mall - torn down
  • Westlakes Mercado Mall - vacant, to be torn down
  • Windsor Park Mall - vacant
  • Sherman, Sher-Den Mall - torn down
  • Texarkana - vacant
  • Tyler, stand alone store - now Texas Spine and Joint Hospital
  • Waco, Lake Air Mall - closed, torn down
Former Jefferson Ward locations

Former Jefferson Ward locations

Delaware

  • Concord Mall, Concord Pike - This store was originally an Almart store, a long-defunct chain based in New York City. It was built in 1965, before the mall existed. The mall was added to the Almart building in 1969. The store became a Bradlees for a brief period in 1988. The store was demolished and a Sears was added to the end of the mall in 1992.
  • Kirkwood Highway - Also a former Almart, this store became Bradlees for a short time, then Clover. Now Kohl's.

Florida

New Jersey

Pennsylvania

Tennessee

Virginia

West Virginia

Wards in print

Notes

  1. ^ Dave Carpenter Montgomery Ward brand name is back as an Internet and catalog retailer Retrieved January 10, 2007.
  2. ^ Montgomery Ward brand makes revival, Austin American-Statesman, December 10, 2006.
  3. ^ Associated Press Montgomery Ward back in business, as online retailer Retrieved January 10, 2007.
  4. ^ Quick, Bob (2000-06-26). "Santa Fe, N.M., Community Group Reaches Compromise with Supermarket (brief article)". Tribune Business News. Retrieved 2007-11-18.
  5. ^ http://ccmallcity.blogspot.com/2006/04/salute-to-montgomery-ward.html Carolina Circle City:Salute to Montgomery Ward
  6. ^ http://www.rockymounttelegram.com/photos/content/news/slideshows/tarrytown/ Rocky Mount Telegram: Tarrytown Mall Demolition
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