The Newly Repackaged Wards

More than eight years had passed, and during that time Montgomery Ward had been largely successful in reinventing its image. Once best known for dowdy downtown stores with green awnings, few services and a highly eccentric company president, the public perception of Wards now reflected an operator of large, modern stores with auto centers, charm schools and fashion shows - a good fit for the sparkling (and sprawling) shopping centers they now inhabited.

The fiscal rewards from all this change were excruciatingly slow in coming, however, so much so that by the mid-60’s Wards had picked up an unflattering but descriptive nickname within financial circles – “Wards, the watched pot that never boils”.

By 1967 the pot had begun to simmer, but not because of an upturn in fortunes. Indeed, the bottom fell out in 1966, with a disastrous 30 percent decline in profits despite a one-year sales record of nearly two billion dollars. There were a number of factors behind this, with just one example being the company’s infrastructure. Behind the shiny new stores, Wards still limped along with an antiquated distribution and inventory control system. The situation was particularly bad with their direct mail operation, where thousands of orders shipped out every month from ancient multi-floor “catalog houses”, just as they had in the 1920’s or 30’s.

Wards’ profit woes contributed to a sharp decline in its stock price. The company’s overall “book value” remained high though, leading to an unexpected turn of events and one of the 1967 business world’s hot stories – Montgomery Ward was now a takeover target! “Somebody loves Ward’s”, read the headline in an April 1967 Business Week article, “but no one seems to know who, or just why”.

The article spelled out three of the rumored suitors, an eclectic bunch for sure: First up was The Sperry & Hutchinson Company, eagerly looking for ways to diversify their business in light of the fact that store chains were dropping trading stamps (including their market-leading S&H Green Stamps) at an uncomfortable rate. Eventually, S&H turned to acquiring a number of furniture manufacturers who would prove extremely vulnerable to the recessionary climate of the 70’s, decimating the company. Another name bandied about was Litton Industries, a massive, diversified conglomerate with interests ranging from aerospace to microwave ovens (at a time when they were cutting-edge technology and cost a relative fortune) to retail design, of all things. In 1968, Litton purchased Brand-Worth, the L.A. - based interior design firm, celebrated here in an earlier post. Third up in the rumor mill was fellow mass retailer and newly-minted cataloger J.C. Penney. For Penney, a pitch-perfect operation on a scorching growth trajectory at the time, such a move would have made precious little sense. All three companies denied any overtures to Wards management.

To squelch the rumors and avert the hostile bid that was certain to eventually come, Montgomery Ward chairman Tom Brooker took steps to ensure the company stayed in control of its own destiny. Brooker conceded that a merger was in fact necessary, but that Ward’s merger partner would be of the company’s own choosing. In mid-1967, Brooker approached a company from a totally different industry with the prospect. He was given a polite “thanks, but no thanks”.

A year later, Brooker approached the same company again, ring in hand, figuratively speaking. This time, owing to Ward’s vastly improved financial performance in 1967-68, the reception was much warmer, and merger talks began. The object of Ward’s ardor was Chicago-based Container Corporation of America, a leading manufacturer of paperboard packaging and a rumored takeover target itself. Together, the two companies would form “a whale too big to push through a door”, as a Wards vice president phrased it for a 1969 Dun’s Review article. Container Corporation was one of the top suppliers to the largest food and consumer products companies, including Procter and Gamble (in an era when virtually all detergents were boxed powders vs. today’s liquid versions in plastic jugs, and Pampers came exclusively in cardboard boxes instead of plastic wrapping), Kimberly-Clark and a host of others. Container Corporation was unique in that they were the first major packaging company to establish their own graphic design studio (in the early 50’s), and years later their design capabilities continued to set the pace for the packaging industry. In August 1968 the Montgomery Ward/Container Corp. merger was finalized, and both companies became wholly owned subsidiaries of a new holding company called Marcor, with Wards stockholders owning two-thirds of the new company.

Predictably, the pairing was soon dubbed “the odd couple” in the press, and objectively it was in many respects. Some advantages were evident – certainly, Wards required vast amounts of packaging for their store-brand goods, and of course the two companies shared Chicago as a home base. (And presumably the syntax that went with it – “Okay, the June sales figures are in. Let’s see where we’re at.”) In a May 1970 Fortune magazine article, Brooker outlined the three keys reasons he sought the merger – one, Ward’s abovementioned vulnerability due to the company’s high value and low stock price, two, Container Corporation’s very attractive cash flow, and three, Container’s president, Leo Schoenhofen, was ten years younger than the soon-to-be-retirement age Brooker, and importantly he had Brooker’s confidence as a worthwhile successor.

By 1970, the verdict was in – the marriage was a success, profits were up, and Brooker was credited with “the strategy that saved Montgomery Ward”, as Fortune put it. Guess it was “all in the packaging”, right? (Ugh.)

Speaking of packaging, the Marcor merger era coincided with the introduction of a new logo for Wards, which began appearing in 1968. Sensing the need for an updated image and seeking a more compact, versatile logo that would work with the company’s rather long name, Wards convened a panel of “experts in design psychology and visual communications” that among others included the art directors of Look and McCall’s magazines, Ford Motor Company’s director of corporate identity and the head of Famous Artists correspondence school (“Can You Draw This Puppy?”) along with luminaries from the fashion, advertising and architectural worlds. The “Blue Bar” logo that they came up with is arguably the most remembered Montgomery Ward logo today.

The Montgomery Ward publicity photos above date from 1968 through 1970. The first photo depicts the very first store to feature the new Montgomery Ward logo, located at North Valley Shopping Center in Denver and opened in 1968. The second photo, of a new Wards store in Sacramento from 1969, shows a “hybrid” featuring the new logo on the parking lot signs and old school lettering on the store itself. (Sorry, I just can’t bring myself to type “old skool”.) This store is now a Burlington Coat Factory, as documented by the ever-reliable Romleys. Also shown are typical housewares, appliance and sporting goods departments, along with a fashion show scene and a friendly Wards service call.

Below, a couple of atmospheric photos to give you a feel for the Wards ‘vibe’…their ‘ethos’, if you will. (Ok, I’ll stop that now.) The model Wards-furnished living room, sporting plastic framed furniture, some cool fibers, lots of chrome, spherical lighting and the obligatory clear globe full of mysterious yellow liquid and accessory light. Toss in a couple of Hermann Hesse paperbacks, and this scene is complete. Lastly, a “group of young people”, resplendent in the latest Wards fashions and carrying (establishment-approved) protest signs. Might have been a rehearsal for an “Up with People” rally - you never know!