Friday, April 17, 2009

A New Day For Wards

Shown above are some Montgomery Ward stores from the late 1950’s. They are among the first stores the company opened after a 17-year moratorium on new construction. Radically different from the quaint, outdated stores that Wards shoppers (a steadily decreasing cohort through the 50’s) were familiar with, they represent a herculean effort to reintroduce and redefine Montgomery Ward in the eyes of the buying public, and to compete in a retail world that had changed in so many ways.

Sewell Avery, whose leadership had saved the company in the 1930’s, was poorly suited to lead the company during America’s phenomenal economic expansion in the postwar years. Convinced that another depression loomed around the corner, Avery “put Wards in a ‘storm cellar’”, as Ward’s 100th anniversary publication put it. No funds would be allocated to new stores or modernization, and even inventory was skimped on. The anniversary book cites $270 million that the company was forced to refund to catalog customers in 1946 due to out-of-stocks, a horrendous sum in that day (or this one, for that matter). The massive refund payout kept Wards from attaining what would have been its first billion-dollar sales year.

Avery’s pessimistic outlook, and his conviction that government policies were in the works to further penalize Wards led him to focus his efforts on building a large cash reserve for the company. To be sure, that goal was achieved ($327 million in cash by 1955, of which all but $23 million was invested in U.S. Government securities – ironic, don't you think?), but it came at the expense of the company’s retail business – its presumable reason for existence.

By 1955, as Fortune magazine later put it, “Montgomery Ward was a very sick cat”, with a “mountainous pile of cash and the company’s reputation for quality and service, but that was about all…”. Probably the most powerful indicator of Ward’s standing in the public eye came when contrasted with Sears. From the mid-1920’s through the early 40’s, as their companies gradually approached the billion dollar mark, Wards and Sears’ annual sales closely tracked each other, with Sears leading throughout the period by a fairly small gap. By the end of the 40’s, the “gap” had turned into a delta, with Sears at $2 billion and Wards at only one. Ten years later the “delta” had become the Grand Canyon, with Sears tallying over $4 billion and Wards still stuck at just over a billion dollars. Sears had taken the completely opposite approach to Wards when it came to expansion, snapping up choice suburban shopping center locations on which they would build huge, sprawling stores. While Wards languished in the past, Sears became the store of choice for postwar America, supplying all manner of goods –clothes, appliances, furniture, lawn mowers, you name it – to help usher in a new era of affordable luxury and leisure-time pursuits for the middle class. In the process, Sears came to symbolize America itself in the eyes of many.

By the mid 1950’s, pressure was building on Montgomery Ward to end Sewell Avery’s autocratic reign and archaic policies. In August 1954, Louis E. Wolfson, described in the anniversary book as a “youthful industrialist and promoter” came on the scene, announcing his intention to bid for control of Montgomery Ward. Wolfson, a forerunner to the corporate “takeover specialists” of the 1980’s, had reportedly gained control over corporate assets worth over $200 million by that time, according to author James Grant in his book “Money of the Mind”. Wolfson proclaimed that he saw a huge opportunity to restore Wards to greatness, putting the large cash reserve to use in expansion. Wolfson, while maintaining a modicum of personal respect for Avery, pointed out (as quoted in the Grant book) that “Ward’s management had blindly and obstinately hitched the company’s future to a depression”. The 81-year old Avery, for his part, batted back fiercely. In the company’s annual report to stockholders for 1954, Avery used the usually placid, non-controversial format of the annual report to outline his defense against Wolfson, a seven-point description of various investigations, alleged conflicts of interest and accusations of self-dealing on Wolfson’s part. Avery closed with: “In contrast, the character of your management has been reflected in the accomplishments of the last 24 years, during which the assets have been built up to $721,000,000 including cash of $327,000,000”.

In April 1955, one of the most famous proxy fights in the history of American business took place at Montgomery Ward’s annual meeting in Chicago. A confused and feeble appearing Sewell Avery took the microphone and attempted to lay out his case, with pitiful results. The whole proceeding was documented by Life Magazine's photographer, as can be seen here. Because of the structure of Ward’s board, only three new directors could be appointed per year, so while Wolfson failed to gain control of the company, his efforts were sufficient to oust Avery from the chairmanship. Wolfson and two associates were seated on the board. Sewell Avery resigned as chairman but would remain on the board for another four years, passing away in 1960. Wards vice president John Barr, a longtime company veteran who had been loyal to Avery but saw the need to expand and modernize, took over as chairman. Wolfson and his two associates, confident that Barr and the new team would revive the company and enhance his investment, resigned from the board early in 1956. Wolfson would later pursue a number of diverse ventures, including helping to finance Mel Brooks’ first film, “The Producers”.

Barr set two main goals – to rebuild Ward’s decimated management structure, and to expand and revamp the store base. The store program started slowly, with only $8 million spent on store remodels in 1956. More importantly, however, plans were being drawn for Wards stores with a completely new image – new styles, merchandising, color schemes, logos, and just about everything else. In late 1957, a new store opened in Portsmouth, Ohio. Shopping center stores, the company’s new main focus, were first opened in Denver, Colorado and Gary, Indiana in 1958, along with a new downtown store in Eau Claire, Wisconsin. By 1959, $150 million had been spent on new store development, with plans announced for another $500 million to be spent over the next five years.

Montgomery Ward, retail’s “Rip van Winkle”, had finally awoken.

Pictured above, from top to bottom: The opening (to-day) festivities of the new Wards store in Gary, Indiana, complete with a rostrum full of dignitaries, the Eau Claire, Wisconsin store (with dignitaries but no rostrum), The new store at Kansas City’s Blue Ridge Shopping Center, with cool looking trellises above the entrances, a wide shot of the Gary store, and a busy scene at the new Wheaton (MD) Plaza location from 1959. For those who prefer black-and-white, below are the 1957 Portsmouth, Ohio, store, another shot of the Kansas City Blue Ridge store, and finally the new Wonderland Shopping Center store, opened in Livonia, Michigan in 1959.


  1. What can I say but, "Incredible Post". Great info and pictures of my favorite department store.

  2. Yet it all went wrong with the birth of the "Blue Block" logo...and Mobil.

  3. Who knew that the behind the scenes crew of Wards played out like a soap opera? The story behind it all is so interesting and shocking to say the least!

    Wards' modern period is just as cool as the Georgian one. What happened to the Gary, IN store? Is that still standing?

  4. The Gary store, and the Village Shopping Center, are still standing. I'm not sure when it closed, but I would guess late 70s or early 80s due to the opening of a Wards in the "new" Century Mall in nearby Merrillville.

    The store became a Goldblatt's after Wards left, until they closed around 2000. The "Seasonal Sales" area of the store (far right side of the picture)was an Aldi.

    Ames opened up during their "second coming" to Chicagoland. Of course this only lasted a year or so.

    In 2005, the building was divided into several stores; Dollar Tree, Anna's Linens, Lot Stores (or something similar), and a rent-to-own place.

  5. I am glad that the Gary, IN is still in use by other chains. Thanks for feeding my curiosity, WillInMilwaukee.

  6. The Wards story continues! At this point, the future looks bright but it will only get worse from here...

  7. Richard - Glad it's your favorite - Thanks! Which Wards did you shop at the most - Honer Plaza?

    Jamcool - Definitely one of the stranger combinations in business history, for sure. "The energy crisis may hurt oil revenues, so let's diversify by buying a struggling retailer!"

    Didi - I fully agree! I felt it would be worthwhile to focus more heavily on the personal side of the Wards story because of all the intrigue. Most retail histories are tedious by comparison!

    Jeffers66 - Thanks!

    Will - Thanks so much for bringing us up to date on the classic Gary store! Goldblatts is another one I fondly remember, and hope to discuss here soon.

  8. Jonah - I was writing my responses when your comment came in. Yes, it (finally) continues. And you're right, although the optimism (and cool-looking stores) would hold on for just a bit longer.

  9. Thanks for your reporting of Ward's incredible history. MY recollection of their stores back in the 50s and 60s are of both State Street and Old Orchard. It seemed that despite their best efforts neither store could match up with Sears and the smaller chains.

    All Chicagoans can thank Mr Ward for his successful lobbying 100 years ago to save the Lakefront from future development.

  10. Anonymous - Thanks very much. Both the stores you mentioned were originally "The Fair" units, converted to the Wards nameplate around 1964, even though Wards had owned them for several years by that time. As you say, Sears had an insurmountable lead by that time, but Wards made a valiant effort.

    I definitely agree that Chicago owes Mr. Ward a great debt of gratitude. His efforts to save the lakefront are largely unheralded today.

  11. I'm glad to see a picture of the Gary Indiana Montgomery Ward store. I used to go there a lot with my parents in the 70's. I was sad when it closed in 1979, & relocated to Century Mall (then a brand new mall). I used to have fun on the escalators, & the store associates hated that I tried to run up the down escalator (when they were in Gary. It was vacant for 6 years when Goldblatts decided to return to Gary in 1985, & stayed there for 15 years, before being bought out by Ames. Ames only stayed in that location for a year before they closed it in January 2002, then completely going out of business 8 months later. The portion that Goldblatts didn't take became Aldi in 1987, & they stayed there for 16 or 17 years. Then Alsi bought the old Save More store building (which was used by Salvation Army Thrift Store, which was already closed), tore down the building, & built a new store there. I don't know what's in that spot today. Dollar Tree opened in a portion of the old MW/Goldblatts/Ames building, which is still there today. Lot Stores (like Family Dollar & Dollar General) was there for a while before closing. Anna's Linens opened in another portion before closing that store, along with the Southlake Mall store (eventually leaving Indiana). Aarons I believe opened in the part that either Lot Stores or Anna's Linens was in. Work One opened in the far end that was part of Goldblatts & Ames. The Village Shopping Center is struggling to stay in business again after losing first Montgomery Ward in 1979, then gained Goldblatts & was doing well for a few years. Since losing Goldblatts & Ames in the 2000's, plus JCPenney & McCrory in 1996 & 1997, it has gone downhill again. With the closing of AJ Wright in part of the old SS Kresge/McCrory store is adding to blow to this once vibrant shopping center.

  12. 4/25/12 wrote:
    Sharp looking Montgomery Wards photos you have here. It only makes me miss the Wards that used to be located at Oakland Mallin Madison Heights, Michigan (now a J.C. Penney's),and especially at The former Pontiac Mall A/K/A Summit Place(now a sad, empty ghost of it's former self.)I Liked the Blue rectangular Ward's sign from the late 60's, but for me, nothing can top that 1950's M-W sign they had with the triangles.That was my favorite Ward's sign.The Pontiac Mall used to have a giant "M-W Since 1882" sign placed above the escalator area, put up in 1962, taken down in 1990.It's sad that Ward's is long gone. Such memories for me as a child and teenager.

  13. 2/10/13 wrote:
    I was ten years off with the official opening year of Montgomery Ward's.The business opened in 1872,not 1882. Also, while the stores no longer exsists, the business of Montgomery Ward's still exsists in the catalog and mail-order/web-order departments. My family still gets catalog magazines from Ward's in the mail. The company just no longer has exsisting stores at malls.