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Store Closing: Montgomery Ward

After 128 years in business, Montgomery Wards department stores are closing for good.

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  • ELIZABETH BRACKETT:

    The newly remodeled store looked good. Shoppers were still heading in the front door. But the big sign said it all. The changing retail climate meant the end had come for an American retail institution.

  • JEANINE TERPENING:

    God, it's been here forever. This is like losing a best Friend. I'm very, very upset about it. I mean, this is the only place I can find, that I bought now, my jeans.

  • EUGENE MILLER:

    I feel it's sad. I feel like something that's been part of our lives for years is passing away. I'm happy about the sales, but I feel like it's an estate sale, you know?

  • ELIZABETH BRACKETT:

    For longtime employees like Iris Morales, the news was devastating.

  • IRIS MORALES:

    God, it gave me… that place, Montgomery Ward's has given me self-esteem. I mean, it's given me… I was able to purchase my home. You know, my kids… I mean, Ward's means a lot. And it's sad.

  • ELIZABETH BRACKETT:

    Montgomery Ward had been part of many Americans' lives since Aaron Montgomery Ward sent out his first catalog in 1872.

  • MAXWELL SROGE:

    Aaron Montgomery Ward decided to send out a sheet of paper to people in rural areas telling them that they could buy from him.

  • ELIZABETH BRACKETT:

    Retail consultant Maxwell Sroge.

  • MAXWELL SROGE:

    And he created that famous line "satisfaction guaranteed or your money back," which we, all of us in the mail order business, use today.

  • ELIZABETH BRACKETT:

    Russell Lewis, director for collections and research at the Chicago Historical Society, says Ward was a true entrepreneur.

  • RUSSELL LEWIS:

    Somebody would go to a store and you would buy something, and they would sell it to you. Ward had a different thing in mind, which is that you can sell products to customers you never saw, and people would buy things they never touched or held. And so this was a revolutionary idea.

  • ELIZABETH BRACKETT:

    Ward's catalogs grew slowly. He built trust among his rural customers by sticking to his money back guarantee.

  • RUSSELL LEWIS:

    Which was unheard of. Really, the operating credo at that time was caveat emptor, "buyer beware." You think of the snake oil salesman sort of personifying this idea that there were people out there bilking them. So this declaration of honesty was new.

  • ELIZABETH BRACKETT:

    Ward's gradually expanded the catalog. They became bigger, more heavily illustrated, chock full of goods– often referred to as "dream books" by rural families. Aaron Montgomery Ward was an early social activist as well as an entrepreneur. His biggest project lay right outside the front door of his office.

  • RUSSELL LEWIS:

    He became impassioned about the lakefront in Chicago. At that time, the lakefront was sort of this no-man's land, this sort of contested space with squatters, and it had some shacks. He also felt very strongly that the lakefront should be something available to all people. And today, you know, Chicagoans have one of the largest waterfronts that's non- commercialized, that's really devoted to recreational space, I think, in the world.

  • ELIZABETH BRACKETT:

    Montgomery Ward stuck with its catalog business alone until the 1920's. Former Ward executive Sid Doolittle says though Marshal Field's and Sears were building stores, the board of Montgomery Ward's stuck to catalogs alone.

  • SID DOOLITTLE:

    In the mid-1920's, Sears began to really go at it very, very aggressively. Ward's became convinced at that point they had to react to that. But it was a reaction, not a positive strategic change for Ward's. And they were reacting all the way from there on.

  • SONG:

    Rudolph the red-nosed reindeer.

  • ELIZABETH BRACKETT:

    Hoping to promote the new stores, a Ward's employee wrote a story to be handed out to customers at Christmastime. But by the time Gene Autry recorded "Rudolph the Red-Nosed Reindeer," it had lost its connection to the store. Sewell Avery took over in 1931. A stubborn businessman, he was escorted from his office by the National Guard when he refused to comply with rules of a World War II rations board. And he totally misread the future.

  • SID DOOLITTLE:

    He was always convinced that after World War II, there would be a recession, and he made statements like, when he saw Sears building these big regional shopping centers and things in the early '50s, "that's okay, I'll buy that property when they go broke for ten cents on the dollar." He was really expecting those things to fail.

  • ELIZABETH BRACKETT:

    How much did Sewell Avery's tenure really have to do with the demise of Ward's today?

  • SID DOOLITTLE:

    I think it was probably the biggest thing that happened in the history of the company.

  • ELIZABETH BRACKETT:

    By the time Ward's decided to expand to the suburban shopping malls, Sears and J.C. Penney's had already gotten the prime locations. Ward's was once again playing catch-up. Then, in the 1980s, the company who had invented the mail order catalog found its catalog in trouble.

  • MAXWELL SROGE:

    The direction of the catalogue business as retailing is specialty catalogs. You go to L.L. Bean to buy outdoor clothes. It became the era of specialty stores, and these were big general catalogs.

  • ELIZABETH BRACKETT:

    Ward's catalog distribution centers also became a problem. This huge eight-story building on the Chicago River was once state-of-the-art for filling catalog orders. But by the 1980s, it had become an albatross. Today it is companies like Lands' End that operate the most up-to-date distribution centers, like this one in Dodgeville, Wisconsin.

  • SID DOOLITTLE:

    Catalog business is different than a retail business because you have to fill individual customer orders, and then bring them together at the end of the line and assemble them into a package that is everything the customer wanted in that order.

  • ELIZABETH BRACKETT:

    And why couldn't Ward's do that?

  • SID DOOLITTLE:

    They did. The trouble was, they were on eight floors, and all the merchandise had to be moved from one floor to another, and it was chaos.

  • ELIZABETH BRACKETT:

    The attempts to modernize the old distribution centers didn't work, and the last Ward's big book catalog came out in 1986. Ward's had the same problem with its retail stores as it did with the catalog. The company never developed a niche, a strong brand identity, or a reason to come to Ward's.

  • MAXWELL SROGE:

    If I ask a man, where do you buy tires, tools, batteries, appliances, he'll say Sears Roebuck. If I ask somebody, where do you get the lowest prices, they'll say Wal-Mart, you know? So the retailers who succeed in the marketplace today are those who have created unique identities.

  • ELIZABETH BRACKETT:

    The proud company's demise was a slow one. The retailer was coming back after being bailed out by its parent company General Electric, after a bankruptcy filing in 1997. But the infusion of cash and the newly remodeled stores couldn't compete with a weakening economy. The stock market slide in 2000, coupled with poor earnings reports and an annual growth rate of just 2%, led to the lowest level of consumer confidence in two years.

  • SID DOOLITTLE:

    The slowdown has only been six months long– and it's not a crash, it's a slowdown. But when things start to slow down, the weakest don't survive, whether it's weak stores, weak companies. This is true of all industries. And Ward's was the weakest.

  • ELIZABETH BRACKETT:

    Other mid-priced general retailers are also in trouble. Sears announced the closing of 89 specialty stores. J.C. Penney's will close 47 stores and lay off over 5,000 workers. The layoffs came after one of the poorest Christmas seasons in the last nine years.

  • MAXWELL SROGE:

    It was one lousy Christmas, you know, as compared to the Christmas before.

  • ELIZABETH BRACKETT:

    The poor Christmas sales were the final straw for Ward's. The result: 28,000 employees will soon be out of work.

  • IRIS MORALES:

    Someone had said that there's life after Ward's. Yes, there is, but, you know, when you've been there a long time and it's your livelihood… I mean, it helps you maintain what you have. And yeah, there is life after Ward's, but it's just trying to get out there again and start all over.

  • ELIZABETH BRACKETT:

    Montgomery Ward's doors are expected to close for the last time within the next three months.

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