Montgomery Ward

Montgomery Ward (popularly known as Wards) was an 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 later 20th century forced the original Montgomery Ward out of business in 2000.

Montgomery Ward is also the name of a new internet / catalog based retailer that was established in late 2004.



Company origins

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Doors of a former Montgomery Ward outlet in downtown Scottsbluff, Nebraska

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. Ward observed that rural customers often wanted "city" goods but were often victimized by monopolists who offered no guarantee of quality. Ward 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 Kinzie streets, with two partners and using $1,600 they had raised in capital. The first catalog in August 1872 consisted of a 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 started using in 1875. Although Ward turned the copy writing over to department heads, he continued pouring 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.

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 W. Sears and Alvah C. Roebuck mailed their first general catalog. In 1900, Wards had total sales of $8.7 million, compared to $10 million for Sears & Roebuck, and the two companies were struggle for dominance for much of the 20th century. By 1904, the company had grown such that three million catalogs weighing 4 pounds were mailed to customers. In 1908 the company opened a 1.25 million ft² (116,000 m²) catalog warehouse along the north side of the Chicago River in downtown Chicago. The building, known as the Montgomery Ward & Co. Catalog House, served as the company headquarters until 1974. It was declared a National Historic Landmark in 1978 and a Chicago historic landmark in May 2000.

Expansion into retail outlets

Ward died December 8, 1913 after 41 years running the catalog business. 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 the following year in 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 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.

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 one hundred 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.


In the 1950s, the company was slow to respond to general movement of the American middle class to suburbia. While its old rivals Sears and J.C. Penney, established new anchor outlets in the growing number of suburban shopping malls, the top executives thought such moves as too expensive, sticking to their urban outlets 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.

By the 1970s the company was struggling to keep up in the retail market. In 1976 it was acquired by by Mobil Oil, which was flush with cash from the recent rise in oil prises. In 1985 the company closed its catalog business after 113 years and began 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 dollar leveraged buyout, making Montgomery Ward a privately held company. In 1994 it began pursuing a strategy of electronics boutique within its stores, called "Electric Avenue & More" stores. It also acquired New England retail chain Lechmere.

By the 1990s, however, even its old rivals had begun to lose ground to low-price competition from K-Mart, Target Corporation, 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 1999 as a wholly owned subsidiary of General Electric. As part of a last-ditch effort to remain competitive, the company closed 250 retail locations in 30 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 Ward's re-structuring plans. On December 28, 2000 the company 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 the largest retail bankruptcy liquidation in U.S. history. Ward's management was respected till the end, as a little known fact that Roger Goddu, Ward's CEO, was offered the CEO position of JC Penney. Goddu declined on pressure from GE, and went down with the ship.

Return of Montgomery Ward

In late 2004, the familiar Montgomery Ward name returned to the retail scene. The new Montgomery Ward company is headquartered in Cedar Rapids, Iowa and is an Internet retailer. The company does not currently operate any retail stores.

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