- The Washington Times - Friday, December 29, 2000

Montgomery Ward Inc., the 128-year-old retail icon that gave the world wish-list catalogs, Rudolph the Red-Nosed Reindeer and inexpensive clothing and appliances, announced yesterday it is closing all 252 Wards stores nationwide.

Sluggish holiday sales were the final nail in the coffin for the retailer. The company's recent history of financial difficulties includes a struggle to recover from its 1997 bankruptcy filing.

"Overall weak holiday sales and a very difficult retail environment simply did not permit us to complete the turnaround that might have been possible in an otherwise thriving economy," Chief Executive Officer Roger Goddu said yesterday in announcing the closing and another Chapter 11 bankruptcy filing. "Sadly, today's action is unavoidable."

The company known affectionately to its customers as Monkey Wards recently tried to reinvent itself, finishing its makeover program in October, but it was too little too late, retail analysts said.

"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."

Yesterday, the company stopped accepting shipments at its 10 regional distribution centers. Employees who attended a company meeting at Chicago headquarters were seen leaving their offices afterward carrying boxes.

Wards operates 12 stores in the Washington metropolitan area. Store managers refused to comment on the closures yesterday. Customers leaving the Montgomery Ward store at Westfield Shoppingtown Wheaton, Md., mall said it was a sign of the times.

"There's too much competition," Adriane Streiff, a Silver Spring resident, said as she pushed her daughter in a baby carriage along the mall walkway. Pointing down the line of stores ahead of her, she said, "If you go down here, you can see about five more stores that compete with Wards."

An elderly man leaving the store who wouldn't give his name said, "I think a lot of stores are going out of business this year. The economy is going down and Montgomery Ward is going down with it."

Just Tuesday, Massachusetts-based discount retailer Bradlee's announced it would go out of business.

Wards spokesman Chuck Knittle said the stores won't close for several months.

"What's going to happen is that there will be going-out-of-business sales over the next several months," Mr. Knittle said. "After that occurs, I would expect that the real estate we own will be sold."

The company began remodeling its stores last year to revamp its image after emerging from Chapter 11 bankruptcy protection in August 1999, when General Electric bought the chain. Industry analysts said the remodeling could not make up for the fact the stores had lost their distinctiveness among specialty competitors.

Montgomery Ward officials had hoped for sales growth of 9 percent this year. Instead, growth stayed around 2 percent. Its market share went to competitors like Home Depot, Target and Best Buy.

The announcement yesterday was a humble end to a former retail powerhouse that competed with Sears, Roebuck & Co. to dominate America's home and clothing shopping.

"Montgomery Ward basically founded the mail-order catalog business," Mr. Knittle said. "It's kind of like a slice of Americana. It's sad."

In addition to announcing it would file for bankruptcy protection from creditors, the company laid off 450 administrative employees yesterday. The remaining 37,000 employees in 31 states will be laid off in coming months.

"You don't need to be an analyst to see that the retail market continues to be very unforgiving," said John Oliver, a spokesman for GE Capital Services, the General Electric subsidiary that oversees Montgomery Ward. "In fact, it's bruising."

The company was founded in 1872 by a traveling salesman named Aaron Montgomery Ward who distributed a one-sheet catalog offering 163 dry goods. The list expanded to become America's first mail-order house to sell general merchandise. Wards opened its first retail store in 1926 in Plymouth, Ind.

Sears, Roebuck & Co. was founded in 1886 and began selling merchandise by catalog in 1896. Ward declined an offer to merge with Sears in 1930.

The competition with Sears and other retailers produced advertising themes that became legendary. Among them was the phrase "Satisfaction Guaranteed" in 1875.

In 1939, a Montgomery Ward advertising copywriter created a promotional character named Rudolph the Red-Nosed Reindeer. The company handed out millions of copies of the Rudolph story, which went on to become a popular Christmas song.

In recent years, the company tried to reinvent itself to better compete with discounters and specialty stores. In 1985, it dropped its catalog operations, but resumed them in 1991. Wards also tried to promote itself as a "specialty store" for homeowners and families.

In the end, diminishing market share forced the chain to close.

• This article is based in part on wire service reports.

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