Friday, December 29, 2000
Montgomery Ward to close doors
Company was a pioneer in retailing
From Enquirer wire services
CHICAGO Montgomery Ward Inc., the department store chain that helped pioneer American retailing, Thursday said it is shutting down after 128 years in business and will file for bankruptcy.
The chain with 250 stores and 37,000 employees in 30 states fell victim to competition from larger retailers with a national presence.
Sadly, today's action is unavoidable, Montgomery Ward chief executive Roger Goddu said in a statement, citing weak holiday sales as the clincher for the decision.
The statement came hours after scores of Montgomery Ward employees began filing out of the company headquarters with boxes in hand.
Employees at Montgomery Ward's headquarters in Chicago packed up belongings and consoled one another as the announcement was made public Thursday.|
(Associated Press photo)
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Several said they had been told at a meeting that General Electric Co.'s GE Capital Unit, owner of Montgomery Ward, would pull financial support in the wake of disappointing holiday sales.
I'm just devastated, said Anece Rich, a 28-year Ward employee who worked in the mail room. They took care of us as best they could.
Montgomery Ward does not operate stores in Cincinnati. Its nearest location is in Lexington, and its Ohio stores are in Toledo, Canton and Cuyahoga Falls. It also operates three stores in South Bend, Elkhart and Merrillville, Ind.
You don't need to be an analyst to see that the retail market continues to be very unforgiving in fact, it's bruising, said John Oliver, a spokesman for GE Capital Services, the subsidiary of General Electric Co. that owns and oversees Montgomery Ward.
Retail analysts said they had heard the end of the company was near.
It's sad. It's too bad because a lot of effort has gone into trying to save the thing, said Sid Doolittle, a Chicago-based retail consultant who spent 28 years as a Ward executive.
Like Bradlees Inc., a U.S. Northeast discount chain that announced liquidation plans Tuesday, Montgomery Ward struggled to match the low prices at Wal-Mart Stores Inc. and Kohl's Corp., and the fashion sense of Target Corp. and specialty apparel chains.
It also clashed with its oldest rival, Sears, Roebuck & Co., particularly in the electronics and appliances market.
Montgomery Ward has lost its reason for being, said Kurt Barnard, president of Barnard's Retail Trend Report. It has nothing to distinguish itself.
Begun in 1872, Ward pioneered mail-order catalogs when it came out with a single sheet of dry-good items for sale. It was the first U.S. mail-order house to sell general merchandise. Sears, Roebuck & Co. was not founded until 1886 and did not put out its first general merchandise catalog until a decade after that.
Ward, which opened its first store in Plymouth, Ind., in 1926, has been financially unstable for years. In 1999, it emerged from Chapter 11 bankruptcy after being acquired by GE Capital and announced a plan to revamp many of its stores. Montgomery Ward in November opened 12 stores, including the one in Merrillville, Ind., most likely in anticipation of a strong holiday season. The other stores opened in Illinois, California and Maryland.
But some analysts said it was too little, too late.
Wards has not established themselves as anything distinctive in the marketplace, said George Whalin, president of California-based Retail Management Consultants. There's just no reason to go there unless maybe they're the closest store to your house.
Lisa Biank Fasig of the Enquirer contributed to this report.
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