PM&M / Related / U.S.A. :

Chicago

[1] : Montgomery Ward (1872 until 2000)

The American merchant Aaron Montgomery Ward helped create mail-order merchandising and built the large mail-order house which still bears his name. Born in Chatham (New York) on February 17th 1844, Ward moved to Niles (Michigan) with his parents and went to work at a barrel factory at the age of 14, followed by an employment at a brickyard. Later, he worked in the Chicago store that became Marshall Field and some time later became a travelling salesman for a wholesale dry-goods house. During his travels he became aware of the farmers' criticism of high-priced country stores and exorbitant middlemen's profits, leading him to the conclusion that it was time for a change. His revolutionary idea was to found a mail-order house that would cut the cost of sales by purchasing direct from manufacturers and selling direct to retail purchasers. Limiting all transactions to cash payments only, he could also eliminate the costs that country storekeepers incurred by selling on credit. Furthermore he also had the idea of allowing purchasers to return, without cost, goods they considered unacceptable.

It should not just stay an idea and in 1872, Ward established the world's first mail-order business; the company's first catalog consisted of 163 items on a single sheet. But his efforts were very successful right from the start and within two years, he published his first real multipage catalog. During 1875 the company finally coined the phrase "Satisfaction Guaranteed or Your Money Back". By 1883 the company's product range filled a whopping 240-page catalog which listed 10,000 items. The company expanded rapidly and by 1890 was forced to move into a new building at Michigan and Madison, right in the heart of Chicago's Loop. Nine years later, Ward had a seventeen-foot statue of a girl added to the building, the 'Spirit of Progress'. But before that, Ward wanted to beautify Chicago's lakefront.

The area east of Michigan Avenue was little more than a dump which consisted of piles of debris, squatters' shacks and railroad tracks. Ward began a movement to clean up the lakefront and fought for years in the courts. In 1897 he finally won and the area became Grant Park as we know it today, Chicago's Front Yard: an open area, free of all buildings except museums. During these and the following years Montgomery Ward offered a large variety of different porcelain items that were mostly only marked with different Montgomery Ward marks. These items mainly originated in Germany, some examples however also include the original manufacturer mark and show other sources, like Silesia. The year 1900 saw a record $8.7 million in sales, a huge amount that was only beaten by Sears & Roebuck with $10 million. But Ward had prooven his point and showed critics that the so-called American Dream could come true.

Aaron Montgomery Ward died on December 7th 1913, leaving the company in the hands of a very capable board of directors. During the 1920s the management of Montgomery Ward started to adapt to the market and in 1926 the first freestanding retail store was opened in Plymouth (Indiana). Successful right from the start the new concept was taken further and by 1928, Wards had opened 244 retail stores. The company sales boomed and a year later, the company already owned an impressive number of 531 stores. Success was overwhelming and other companies started to become very interested in the whole concept; in 1930 Montgomery Ward even declined a proposal to merge with Sears. Another impressing achievement however was made in a totally different segment as Montgomery Ward actually influenced Christmas. During 1939, advertising copywriter Robert L. May developed a character and illustrated poem for company executives which was an instant success and today has a nearly world-wide reputation: Rudolph the Red-Nosed Reindeer.

In 1968 the company merged with the Container Corporation of America to form Marcor Inc. which was then acquired by the Mobil Oil Corporation in 1976. The position of the chain as a market leader had started to shift in the 1960s as Sears, J.C.Penney and Wal-Mart began to dominate the scene and through the pressure of the management, Wards discontinued its catalogue operations in 1985 to focus on its retail stores. In 1987, Wards began a push into the consumer electronics segment, using the Electric Avenue name and greatly expanding 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. At the same time, Wards even spun off Jefferson Ward, a short-lived discount department store version of Montgomery Ward with the same concepts as most discount department stores, but the idea was discontinued in 1988 and most locations were converted into Bradlees stores.

After all this confusion the Wards management went through a successful $3.8 billion leveraged buyout that made Montgomery Ward a privately held company again. In 1991 they resumed their mail-order catalog business. Based on initial success and further growth, Montgomery Ward opened its first Electric Avenue & More stores in 1994 and acquired the New England retail chain Lechmere, slowly also rebranding their own stores simply to Wards. But the management had bitten off more than they could chew and in 1997 the company had to file for Chapter 11 bankruptcy. Luckily enough, the GE Capital Services purchased Montgomery Ward in August 1999 and brought it out of bankruptcy again. The saved company abandoned the specialty store design and began to offer moderately priced apparel, electronics and furniture.

Everything looked perfect for a while but on Thursday, December 28th 2000 Montgomery Ward yet again announced plans to file for Chapter 11 bankruptcy protection and shutter 250 stores in 30 states and lay off its 37,000 employees. All stores closed within weeks of the announcement and the subsequent liquidation was at the time the largest retail bankruptcy liquidation in U.S. history. But that was not the last heard from 'Montgomery Ward' as the company reappeared at the end of the year 2004 as an online retailer based in Cedar Rapids, Iowa - using the same slogan and the full Montgomery Ward logo that nearly died with the 2001 closure of the original company.

 


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