Death Of Montgomery Ward: An Early Sign Of Retail Shakeout?

Posted: January 20, 2001

When venerable U.S. business icons bite the dust, victims of the brutal realities of the changing marketplace, it's always a bit of a surprise, even if the signs of impending doom were there. Being part of the national fabric, they seem to acquire a certain invincibility.

But in fact, they die slow, smelly and somewhat deserved deaths, as the Montgomery Ward story illustrates.

Who would have thought that at their peaks, and even when the hemorrhaging began, some of the oldest names in American business would one day simply close their doors for the last time, no longer there to be taken as a given on the cultural landscape? Woolworth, Pan American World Airways, Eastern Airlines, Horn & Hardart (a.k.a. the Automat), Look magazine, to name a few.

And now Montgomery Ward, Trans World Airlines, Oldsmobile. Like the others, in their heyday they were synonymous with the businesses they were in. If you spoke of Montgomery Ward, you were talking about a leader and pioneer in the department store business. TWA? A trailblazer in global air travel. Oldsmobile? Yes, your father's car, and wasn't he proud to own one, and weren't the neighbors envious?

For much of its life since Aaron Montgomery Ward established the company in 1872 as the first dry-goods mail-order catalogue business, the firm, along with its then arch-rival Sears, Roebuck & Co., dominated the department store business.

The company rode a wave of popularity among shoppers who liked Ward's idea of providing a wide range of affordable merchandise of respectable quality under one roof. It coined the phrase "Satisfaction Guaranteed or Your Money Back." Legions of satisfied customers became loyal customers.

Before the turn of the last century, the company was producing a 240-page catalogue listing 10,000 items. In 1939, a Montgomery Ward copyrighter, Robert L. May, created a poem about an ostracized little red-nosed reindeer named Rudolph, later immortalized in song by another icon of the era, Gene Autry.

(A Montgomery Ward catalogue brought me my first boyhood bike, a Schwinn beauty that managed to reach me in Panama one Christmas during World War II - a small miracle, since it came by freighter through the Caribbean, where German U-boats were prowling shipping lanes.)

But in recent decades at Montgomery Ward, a certain rot set in, culminating in the announcement that the company has filed for Chapter 11 bankruptcy protection. In the weeks ahead, all 258 Montgomery Ward stores across 30 states will close, putting 28,000 employees out of work.

The company, in hock up to its eyeballs to its parent, GE Capital, a unit of the powerful General Electric Co., blamed poor holiday sales and competition from discount stores such as Target and Wal-Mart, as well as more fashionable midpriced department stores. But anyone who shopped Montgomery Ward in recent years knows it went much deeper than that. Simply and indelicately put, it had acquired a reputation for offering rather cheesy merchandise in rather cheesy surroundings. Customers referred to the company as "Monkey Wards," more as a barb than an affectionate nickname.

Montgomery Ward may get some company in the department store graveyard. Analysts say that if the faltering economy worsens, other retailers could disappear, be forced to close stores, or be taken over. The rout may have started. Sears, the most storied name in American retailing, has announced plans to close 89 stores and cut 2,400 jobs. Saks, another department store stalwart, said it will close its 60,000-square-foot Younkers store in Bettendorf, Iowa.

Sears, despite prodigious efforts to reinvent itself as a trendy, name-brand outlet, still hasn't been able to shake its image as a clunky workingman's store more given to polyester than fine fabrics on its clothing racks.

Still, I think I'll go and check out what my local Sears store has in bikes. Maybe a sleek, racy descendant of the one I got from another piece of Americana: Montgomery Ward & Co., 1872-2001.

Will Wright is a columnist for the financial news site Money.net and a former foreign correspondent.

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