Saturday, December 25, 2010

A Merry Christmas to All

Another evening of Christmas shopping winds down at one of America’s earliest and most famous shopping centers. This is Framingham, Massachusetts’ Shoppers World, pictured here all-decked out for the season in the early 1970’s.

A two-story outdoor shopping center, opened in 1951 and anchored by a magnificent “flying saucer-like” Jordan Marsh department store on one end (which is visible in the background of the photo), Shoppers World drew customers from a wide swath of the greater Boston area. It was a wonderful attraction at holiday time for years on end. Among its many distinctions, Shoppers World boasted the first of many shopping center-based indoor theatres of what would become the General Cinema Corporation.

The original structure survived more or less intact, despite a plethora of tenant changes and store remodelings, until 1994 when it was demolished. A completely different “Shoppers World” center now sits in its place.

My very special thanks to Michelle McElroy of the Framingham History Center for the use of this great photo. Michelle writes a blog called This Is Framingham, a mix of current event news and area history. Recently, Michelle started a fun new site called Different but the same, where she compares past and present packaging of household-name food items and consumer products.

I want to take this opportunity to thank you, friends and readers of this site, for your continued interest and for your comments and kind emails. Wishing you and your families the joy and peace of what Christmas brings and a wonderful and healthy new year!


Thursday, December 23, 2010

It's Beginning to Look a Lot...

… like Christmas!
Ev'rywhere you go -
Take a look in the five-and-ten

glistening once again

With candy canes

and silver lanes aglow

It's beginning to look a lot like Christmas

Toys in ev'ry store

But the prettiest sight to see

is the holly that will be

On your own front door

A pair of hopalong boots and a pistol that shoots
Is the wish of Barney and Ben

Dolls that will talk and will go for a walk
Is the hope of Janice and Jen

And Mom and Dad can hardly wait for school to start again!

Photos by F.W. Woolworth Co., circa 1948-55.
Lyrics by Meredith (“The Music Man”) Willson, circa 1951.
Bing Crosby vocal imitation by You, circa 2010.

Wednesday, December 22, 2010

The Nativity at Sears, Early 1960's

An elaborate nativity scene tops off a Northern California Sears store, in a circa 1962 photo from Display World magazine. King Herod’s palace looms in the background. In real life, the Herodium, as it was called, was only three miles or so away from Bethehem, so the artistic depiction makes sense. It’s a very nice contrast to the typical Santa/Christmas Bells/Snowflakes themes most often seen on their holiday store exteriors. Artificial palm trees complete the effect.

As you can see, this architectural design featured real palm trees as well. A bonafide classic, Sears built scores of units similar to it in the West (see examples 1, 2), their strongest region at that point in time.

In a nod to the secular Christmas tradition, a white-flocked (As they all should be. At Sears, at least!) Christmas tree is visible in one of the main floor display windows.

This store still exists in Mountain View, California at the San Antonio Shopping Center, located on that state’s historic El Camino Real highway route. Not sure if they went with a Nativity scene this year (my suspicion is they haven’t in years), but flocked Christmas trees are probably a safe bet.

And once again, since we’re talking Sears, thought I’d mention the great Wish Book Web site – featuring Sears Christmas catalogs from several classic eras, scanned in full for your dream-reliving pleasure. Fun stuff, especially at this time of year!

Tuesday, December 21, 2010

Christmas at Chris-Town, 1962

Eight-foot tall toy soldiers guard the facade of one of America’s most fondly-remembered malls, Phoenix’s Chris-Town, in this 1962 photo. The soldiers (and the candles, also eight feet tall) represent a type of decor element that is seen less and less today. Both the soldiers and the candles were manufactured by General Plastics Corporation, a Marion, Indiana-based firm that supplied Christmas decorations for malls, department stores, office buildings and city streetlights everywhere for decades.

The mall itself, which opened on August 24, 1961, was a superb example of interior design. It featured three gorgeous public areas - the Court of Fountains, the Court of Flowers and the Court of Birds, all delights for local shoppers, especially the latter. The mall’s anchors were J.C. Penney (one of the very last “yellow-letter sign” Penney stores), Montgomery Ward and the first and only branch of the 66-year old downtown Phoenix department store, Korrick’s. In 1966, Korrick’s sold out to Broadway-Hale Stores Inc., and the store was remodeled and rechristened with The Broadway nameplate.

To learn more about Chris-Town, of which now just a remnant exists, let me recommend this wonderful website, which is entirely dedicated to its history. It features many excellent photos, including some great night shots from the following Christmas, 1963.

All these scenes need now is a little snow, right? Oh yes, this is Phoenix we’re talking about. Then how ‘bout some white-colored pebbles?

Monday, December 20, 2010

'Tis the Season of Good Taste!

A pastoral holiday scene adorns the backwall of an IGA supermarket, circa 1968. It’s a tasteful depiction of a snow-flocked, apple-bearing cypress tree, standing proud while a lone reindeer looks askance from the side.

Clearly, good taste wasn’t strictly confined to the holidays at this particular IGA - just look at the clean lines of the clock/light fixture/directory sign to the right. I’d love to hang one of these in my living room, minus the directory signs, of course. (Wouldn’t you?) Maybe one will turn up on eBay, and then all I’ll have to do is install $3000 worth of header steel in my ceiling!

In the foreground is the jams and jellies aisle, filled with brand names that still exist today, long before glass jars gave way to plastic. Of particular note are the “big three” peanut butter brands – check out the standard size jar prices, fitting every peanut butter budget – Peter Pan at 46 cents, Jif at 47 cents (and virtually the same label design as today) and Skippy at 48 cents. Gotta stock up for those peanut butter cookies! Then, of course, you had Smucker’s “Goober Grape” (69 cents) for affluent kids.

And in a stroke of IGA marketing genius, the iron-on patches are located right next to the peanut butter display, perfect for exasperated mothers (like mine) who constantly had to patch holes in our jeans. My brother might have been the world record holder - he would wear a hole in a new pair within 4.7 days on average, sledding season or not.

Tuesday, November 30, 2010

Save At Venture...Save With Style!

A new field of study has emerged in the past several years. Our most esteemed institutions of higher learning – Harvard, MIT, Stanford, Triton and others - have been uncharacteristically slow to recognize it and develop the appropriate degree curriculums for it. This lack of formal recognition has not deterred those who carry on this vital work, however.

I’m talking about the Retail Archaeologists – those hardy souls who brave the elements… who risk running afoul of the law…who put their life on the line, walking on brittle abandoned department store floors and roofs, amid falling debris, in order to capture the perfect shot of a day-glo wallpaper remnant, a patch of original tile, a section of a zig-zag awning. These are the people who unearth the relics, who reveal the work of the ancient masters of the 50’s, 60’s and 70’s, buried beneath years of neglect and fake stucco remodelings. It is they who perform these arduous tasks, while the rest of us sit in relative comfort in front of our laptops, snacks at hand, while “The Office: Season Four” episodes on DVD blare from our television screens. Where would we be without them, I beg?

There is one type of relic that particularly warms their hearts, and many of ours as well. A good many of these relics are still out there, wearing one of any number of nameplates - Kmart, Big Lots, Hobby Lobby…you name it. They have a unique identifying feature – a mesmerizing, converging and diverging diagonal pattern etched into the cement facades, placed there for reasons unknown. Had Erich von Däniken looked into this, it would have surely scored him another best seller. These were the late, great Venture stores.

Venture was a relative latecomer to the discount store world. By the time the first store opened in January 1970, discount stores were part of a well-established concept. The controversial early years of discounting, which struck deathly fear into old-line department store chains and featured battles with (and the ultimate defeat of) fair-trade statutes - laws that allowed the manufacturers of goods to set minimum sale prices - were over. By this time, most of the key regional and multi-regional players were in place, from the earliest discount chains (Zayre, J.M Fields and the other former “mill stores”), through the famous ‘Class of 1962’ (Kmart, Woolco, Target and Wal-Mart, all founded that year) and a plethora of others. Indeed, within just a few years, the Seventies economy would begin to shake out some of the weaker players, the first of many unfortunate “elimination rounds” to follow.

The Venture stores were a creation of The May Department Stores Company, a proud 90-plus year old chain of – well, the name pretty much explains it, that was based in St. Louis. In 1969, just before Venture’s launch, May was America’s third largest operator of “traditional” department stores, behind Federated (Lazarus, I. Magnin, Abraham & Straus, Bullock’s, Foley’s, Bloomingdale’s and Filene’s, among others) and Allied Stores (Jordan Marsh - New England and Florida divisions, The Bon Marché, Stern’s, Maas Brothers, Donaldson’s, Cain-Sloan and others).

At the time, May had an impressive lineup of store banners, including Famous-Barr in St. Louis, Kaufmann’s in Pittsburgh, The Hecht Co. in Baltimore and Washington, D.C. and surrounding areas, and two small operations in Ohio’s steel belt (although it was starting to rust by that point, for sure) - O’Neil’s in Akron/Canton and Strouss-Hirshberg in Youngstown. There were four divisions that operated under the May name: May-D&F in Denver (the first May stores had opened in nearby Leadville in the 1880’s), May-Cohens, Jacksonville, Florida’s largest department store, “The May Co.”, a major Cleveland area chain that was struggling at the time (See comments.), and “May Co.-Southern California”, far-and-away the largest division, with 18 stores and counting in that most vital of markets. May was also a major developer/owner of shopping centers, including Northland, South County and West County in St. Louis and a number of huge Southern California centers, such as Eastland in West Covina, the classic Mission Valley Plaza in San Diego and L.A.’s legendary Topanga Plaza, among others. (“Topanga” is thought to mean “a place above”. I hate to admit that when I first heard the word years ago, it brought to mind the sound effects from Don Martin’s famous Mad magazine cartoons. Slap me.) Then there were some newcomers to the May Company fold – in November 1965, they bought out G. Fox and Co. of Hartford, Connecticut, a downtown department store that May intended to expand into suburban locations. In July of the following year, May acquired Portland, Oregon-based Meier & Frank, a downtown store with two branches, at Lloyd Center and in Salem.

These last two acquisitions caused a problem that formed part of the impetus behind the founding of Venture. In the mid-1960’s, the U.S. Federal Trade Commission took a surprisingly aggressive stance in the area of retail mergers. The supermarket chain Winn-Dixie, for example, was barred from acquiring any additional grocery chains for a ten-year period starting in 1966. The following year, the five-year old merger between Von’s Grocery Co. and Shopping Bag Markets was invalidated altogether, forcing Von’s to sell off the latter chain. Sure enough, May’s recent acquisitions caught the unwanted glare of the FTC, and an investigation was announced. To avoid further scrutiny and the possibility of having to give up their newly won prizes, May executives offered a self-imposed moratorium on any further chain buyouts for a five-year interval. “Ten years and ya got a deal”, the FTC responded in the fall of 1966. (Note: the foregoing is not the actual consent decree language. Just thought I’d clarify.) Thus, an important avenue of growth was now closed off.

There were other reasons behind May’s decision to plunge into discounting. While there wasn’t a “deathly fear” of the discounters, there was certainly an awareness that some business was slipping out of May’s hands into theirs. More importantly, it would provide an expansion gateway into areas that May didn’t have a presence, notably Chicago.

As it happened, the timing couldn’t have been better for May to launch a discount operation, as one of the industry’s true visionaries was suddenly on the market, ready for a new challenge. This was John Geisse, who in mid-1968 resigned from Dayton Corporation (renamed Dayton-Hudson the following year), for whom he started Target in 1962. Geisse is widely credited as the originator of the “upscale discount retail” concept. The accounts vary as to why Geisse left Target, ranging from disagreement with fellow Dayton executives about expansion plans (Geisse favored saturating existing markets over expanding into new ones, according to author Laura Rowley in her book "On Target") to a snub for the presidency of Target (despite his key role, he only held a v.p. title), to the notion that Geisse vastly preferred the excitement of the start- up period versus the long haul of day-to-day operations, as retired May chairman and former Dayton vice president David Babcock later told Discount Store News.

When Babcock, who himself resigned from Dayton to take an executive position at May in 1967, got wind of Geisse’s resignation, he immediately contacted him. The two men had worked together at Dayton since the early 1950’s, and Babcock was well aware of Geisse’s accomplishments there. He told Geisse he “felt there was room for another Target”, and arrangements were made for Geisse to pitch the “upscale discounter” concept to May’s executive committee. On September 3, 1968, a Wall Street Journal article made it official – “May Appoints Geisse To Head Discount Venture”. No pun intended.

The new subsidiary, called Venture Stores, Inc., was organized throughout 1969 with the goal of opening the first store early the following year. On January 29, 1970, right on schedule, the first Venture store opened in the St. Louis suburb of Overland, Missouri. The book “On Target”, in noting the similarity in layout between the early Venture stores and Target, features the following quote from a Target executive: “John (Geisse) went from Target [to the May Company] with the rolled-up blueprints of the chain under his arm – and the first Venture store was identical in layout.” Considering Geisse’s intimacy with the concept, of course, the blueprints themselves were hardly necessary. A successful formula was a successful formula, and by mid-1971 six Venture stores were open: four in the greater St. Louis area –Overland, Kirkwood, Kingshighway at Christy Boulevard, and Fairview Heights, Illinois - and two more not far away in Alton, Illinois and Springfield, Missouri.

Through Venture’s first couple of years, its expansion was fairly slow and methodical. By the end of 1972, there were 12 stores - a critical milestone, because that was the point at which May management felt that the chain “would have sufficient volume and market penetration to support a professional central organization”, as stated in May’s 1972 annual report. Only two additional stores were planned for 1973, including a huge 162,000 square foot store in booming suburban St. Charles.

It was an approach that made sense, considering the plight of a number of several discounters and variety stores in the unforgiving economy of those years. Soon, the casualties would begin mounting – the Interstate chains (Topps and White Front), the American-as-apple-pie W.T. Grant, and more to follow as the decade wore on. Meanwhile, the focus at Venture was on brand building. A May 1974 article by New York Times reporter Isadore Barmash on the gloomy state of the discount biz features some great insights from Venture chief John Geisse on his advertising philosophy, which was to promote “images, rather than seek to capitalize merely on the merchandise advertised. Our gross margin results seldom pay for the ads we run, so that we have to gear our ads to produce a good over-all image for the company.” It’s a shame more retail chains didn’t take his advice.

The pace accelerated in 1974/75, however, as Venture pushed on into two important new markets – four new units in the greater Kansas City area – two on the Missouri side (Kansas City and Independence) and two on the Kansas side (Kansas City and Overland Park), all large stores. The big move, from a long-term standpoint at least, came in February 1975, when the company opened its first three stores in the Chicago area – in Oak Lawn at 95th and Crawford, Calumet City at River Oaks Center, and in Mount Prospect at Elmhurst Road/Route 83 (“eighty-tree” for you non-natives) and Dempster Street, on the former site of a National Food Store. This last one was close to my heart, and even closer to my junior high school – just a couple of blocks away.

(It was an interesting era to be in grade school. Some of my teachers had begun their careers in the early 1950’s, and twenty-five years later still had the demure manner and conservative style of dress one associates with that era. Then you had my math teacher, who wore shoulder-length hair, a ‘stache and an attitude and played rock music 45’s in class. The class’ favorite was “Bad Time” by Grand Funk, which I’ve probably heard three times since 1976 but still remember very well. He inscribed my seventh-grade yearbook “Eat a peach”, as I recently rediscovered. The school was torn down in the early 1980's due to a declining kid population.)

Interestingly, these initial Chicago area Venture stores were all teamed with A&P supermarkets, with A&P as a lessee to Venture. The Mount Prospect store sported the first A&P “tri-color” logo sign I ever laid eyes on, looking subtly attractive and modern against Venture’s trademark diagonal-patterned cement facade. The stores shared a common passageway, to the probable relief of A&P, who viewed the “Venture venture” as a lifeline. It would turn out to be A&P’s last gasp in the Chicago area.

Venture pulled out all of the stops for their Chicago launch, with month-long grand opening sales and a huge TV advertising blitz, each spot ending in the soon-to-be-familiar refrain – “It’s not just another discount store!!!” Venture chairman John Geisse hit the promotion trail as well, showing up at all three grand openings and giving a speech before that all-important audience – the Mount Prospect Rotary Club, as reported in the Daily Herald on February 25, 1975. In his talk, he gave a historic overview of the discount industry, with insights along the way as to why certain chains succeeded and others failed. He cited the example of one chain that “maintain(ed)a ’controlled dirt’ level in its stores indicating to consumers that it was a low overhead business”, and mentioned others that “always thought the next step was the big promotion” or “had no fashion sense” , while the discounters that prospered were “properly managed”, ‘’offered one-stop shopping”, and handled “presold” merchandise – “items purchased periodically which the housewife doesn’t need guidance in selecting”. He also addressed the special appeal of discount stores to the teenage market, where “peer needs exceed their ability to buy”. Oh, how I’d love to have been in that audience, especially since it took place so close to home. As it was, it was probably a typical weeknight for me… putting off my homework until the last possible second…lobbying for permission to stay up and watch Hawaii Five-O or whatever else was on at 9pm...ah, the life of a sixth grader!

Not long afterwards, Geisse left the May Company to start his own consulting firm. In 1976, he was appointed chairman of Ayr-Way stores, the former discount division of L.S. Ayres & Co., an Indianapolis-based department store chain. A decision by the FTC, which was obviously pretty active in the 70’s as well, forced Associated Dry Goods to spin-off Ayr-Way after its 1972 acquisition of Ayres. Ironically, ADG would itself be bought out by May in 1986, while the Ayr-Way stores would ultimately become Target units. (I should probably put this stuff in scorecard format, it would be easier to keep up with. For me, that is.) In 1983, Geisse would start up yet another company, called the Wholesale Club of Indianapolis, which grew to 24 stores and $650 million in volume before he sold it in 1990 to Wal-Mart (Geisse was a close friend of Sam Walton), whereupon the stores were converted to Sam’s Clubs. John Geisse passed away in March 1992 at the relatively young age of 71.

In March 1978, Venture reached an agreement that would nearly triple its presence in the Chicago area, making it the company’s most important market. After 17 years, Jewel Companies, Inc., decided to pull the plug on its Turn-Style discount store division, which had been struggling of late. Venture purchased 19 of that chain’s stores, 10 of which were in the Chicago area, including key locations in Glendale Heights, Schaumburg, Deerfield, Skokie and Merrillville, Indiana, among others. Also in the mix were locations in the Quad Cities and in downstate Illinois. At the end of 1978, there were a total of 20 Venture units in Chicagoland, including the Turn-Styles and two newly-built stores. Two additional new stores would open there in early 1979. With some of the finest store locations in Chicago under their belt, the airwaves were soon filled with a catchy new slogan, “Save at Venture…Save with Style”, which was adopted in 1981.

From this point, Venture’s growth settled back into a steady pace, adding a handful of new stores per year in St. Louis and Chicago, and the occasional multi-store entry here and there into other heartland markets – three stores in Oklahoma City and two in South Bend, Indiana, for example. By this time, Venture was no longer the May Company’s only “discount” division – in 1979, May acquired Topeka, Kansas-based Volume Shoe Corporation from the Pozez family. Volume Shoe was better known by their principal store banner, Payless ShoeSource. By 1985, there were nearly 1,900 Payless outlets, compared to 62 for Venture, doing only two-thirds the sales volume of Venture, but turning in more profits. In any event, Venture accounted for an impressive 20% of May’s total sales that year.

The following year, another discount chain would join the May Company fold, one with a bit more similarity to Venture. In October 1986, after months of negotiation, May bought out rival department store operator Associated Dry Goods, picking up venerable nameplates such as Lord & Taylor and J.W. Robinson, among many others. Also included were the Loehmann’s women’s apparel stores, which May quickly sold off. The “similar” operation was Caldor, the 35–year-old, Norwalk, Connecticut-based discount chain with a geographic footprint extending from New Hampshire to Virginia. ADG had purchased the company from founders Carl and Dorothy Bennett in 1981. At the time of the May buyout, Caldor was in the midst of a major expansion in New Jersey, opening five new stores there in 1986. While larger than Venture (115 stores compared to Venture’s 65), Caldor was far less profitable. May’s 1986 annual report, the first one to follow the ADG buyout, acknowledged Caldor’s problems, blaming them largely on excess inventory. Speculation arose that May would combine Caldor and Venture into a single chain, presumably to spread Venture’s winning ways throughout the entire operation.

That never happened. As the 1980’s rolled on, it was evident that the May Company was no longer interested in the discount store business. By 1989, they were looking for a graceful exit. Many factors played into this, I’m sure, including little stomach on May’s part for “fixing” Caldor, and the fact that their two discount chains combined now made up only 12% of the company’s revenue. Maybe they saw the oncoming competitive threat from Wal-Mart, but few crystal balls were that accurate at the time. And with Lord & Taylor now under their wing, they no longer needed the discounter for a foothold in Chicago, if that was a concern. A June 1989 article by the NYT’s Isadore Barmash got to the crux of the issue: “May doesn’t need to sell these discount retailers, but admittedly, they don’t fit May’s department store image”, one analyst told Barmash, and a May insider added: “The fact is that Farrell and Hays (David Farrell, then May’s CEO and Thomas Hays, its president) never really liked the discount business, with its different economics.” Enough said.

One interesting scenario that made the press was a proposed “swap” arrangement, where May would trade the Venture and Caldor chains to Dayton-Hudson Corporation (the stores would then be converted to Target units) in exchange for their namesake department store chains, Minneapolis-based Dayton’s and Detroit-based Hudson’s. While this never came to fruition, May eventually did come to own the former D-H department stores, which by that time were flying the Marshall Field’s banner, in a 2004 transaction. (Dayton-Hudson had bought Marshall Field’s from the BATUS Group in 1990 and later adopted the Field’s name for all of their department stores. Let me get that scorecard out again.)

On October 11, 1989, May announced its plan – as reported by the Times’ Barmash the following day, Caldor (118 stores then) would be sold to CAL Holdings, a new company set up by Caldor’s top management and an outside investor group. The May Company would retain a 20% equity stake in the new firm. The 73-store Venture, on the other hand, would be spun off to May shareholders as a separate company, with each May shareholder receiving a proportionate number of shares in Venture Stores, Incorporated. Delayed for over a year, the spinoff finally took place in November 1990.

Venture’s existing management, including chairman Julian Seeherman, remained in charge, and they had ambitious plans for expansion. These plans included a move into a new region that would ultimately seal the company’s fate. Up to that point, their stores had been located in or bordered the Midwestern states. In late summer 1993, Venture opened 11 brand new stores in Texas - six in the Houston area and five in the Dallas/Ft. Worth metroplex, along with a distribution center south of Dallas in Corsicana.

The focus here would be on “micromarketing”, a beloved term at Venture of late, where merchandise assortments for each store were finely tuned to the local buying audience. (As if that weren’t already required in their existing markets, we’re left to surmise.) For the Texas stores, apparently, this meant home décor themed with “cowboy boot, coyote and armadillo designs” in wall art and on throw pillows, and “leather handbags with ‘Texas’ boldly embossed on the front”, according to an August 1993 Discount Store News article. I’ve seen lots of armadillos over the years, but never a live one, just the “roadside” variety. I wonder if they were pictured “feet up” or down. (My apologies for the preceding lapse in taste.)

Jumping into two markets that were among Wal-Mart’s strongest and best-established territories was not the biggest problem with Venture’s new strategy. Far worse was the diversion of resources that should have been used to shore up Venture’s key market, in the face of “an onslaught of new Wal-Mart and Target locations in metro Chicago”, as Discount Store News later put it. The same article revealed that “(by) mid-1995, fewer than half the beleaguered Chicagoland stores had been through major remodeling”.

It would be some time before the seriousness of Venture’s expansion miscue was fully realized, and during that interim they tried some new initiatives. One was a new logo, an update of the “equity-invested diagonal stripe concept of the previous Venture logo but replac(ing) its industrial-looking, hard-edged lines with softer ones that suggest a furled flag”, according to a July 1995 Chain Store Age article. The logo’s “softer lines’’ tied in with another management decision, a move to reposition Venture upmarket, emphasizing higher end apparel sales while downplaying consumable items. Then came a dip in the U.S. clothing sales market. Without the traffic-driving aspect of consumable items to offset this, the results were calamitous.

By mid-1997, it was painfully clear that the Texas move was a mistake, that most of the company’s stores there would not be profitable over the long haul. At that time, Venture made the decision to sell 20 of its stores to Kmart Corporation, including ten stores in Houston, five in Dallas, two in Indianapolis and one each in Tulsa, Des Moines and Waterloo, Iowa, as Discount Store News reported on June 21st of that year. The chain would now have 93 stores, down from its 117-store peak in 1996. The company’s stated goal was “to focus on its core markets of Chicago, St. Louis and Kansas City”, although eight of the better-performing Texas stores – three each in Dallas and Houston and one each in Corpus Christi and Amarillo – would be retained for a while.

Not a long while, as it happened. In May 1998, after yet more store closings, the company threw in the proverbial striped towel, declaring bankruptcy and announcing the closure of the then remaining 73 Venture stores. Some 45 to 50 of them ended up as Kmarts. (And more than a few of those are now something else, I’m sure.) Discount Store News summed up Venture’s demise as the result of a string of bad decisions – “failure to move into food” or to “compete promotionally with Target”, and “turning its back on tired, old stores in its core markets and heading to Texas’’ as previously discussed. At the most basic level, the company’s management “wasn’t hungry enough to beat the competition”, and they fell into a “middle zone” of not knowing whether to position Venture as “a lead(er) in price, assortment or service”. And so they bowed out, instead of facing the fiercely competitive retail world we’ve grown accustomed to in the 21st century. But I miss those diagonal stripes.

The first two of the May Company photos above depict scenes from the earliest Venture stores in 1970. Note the old, sliding credit card machines at the end of the checkout lanes, a good distance from the checkers, something I remember seeing in a number of discount stores. Funnily enough, I can remember my grandfather’s bank-issued Master Charge card (they’ve gone by the name MasterCard for eons now) actually had a photo I.D. section, back in 1971!

While the other three photos, from 1978, 1979 and 1981 respectively, are focused on the checkout areas as well, they provide a nice overall feel for the “golden age of Venture”, as well as an interesting glimpse of some fads and fashions of the time. The music: Neil Diamond (of course), Eric Clapton’s “Backless” album (panned at the time and underrated today – I think “Promises” is one of his very best songs) and Kenny Rogers’ Greatest Hits (I didn’t know anyone actually bought that album – I thought it was automatically issued to every American household at the time. Whether you wanted it or not.) Atari game systems make a couple of appearances, and then there’s the ubiquitous Milton Bradley “Simon” electronic game. (With a brain. Do what it says or go down the drain.) These photos also capture a tectonic shift in American life, the aftershocks of which are still felt today – the Transition from Paper to Plastic. In the last photo, you can see a lady buying a blue-and-white striped dress. She obviously wanted to continue the “Venture experience” at home. That’s the spirit!

Lastly, a 1971 Venture grand opening ad, for store number six, in Alton, Illinois:

Saturday, November 6, 2010

It's the Montgomery, Not the Ward

“Well the first thing you know
Mobil had some bucks to spare,
Kinfolk said "That drillin’s such a bear!"
Said "Stores and catalogs are where you oughta be"
So they loaded up the stock
And they bought Montgomeryyy…
Ward, that is…..”

(With apologies to Lester Flatt and Earl Scruggs. And anyone still reading this post.)
To be sure, the biggest story of the 1970’s for Montgomery Ward was their acquisition by Mobil Corporation. After 96 years as an independent company followed by six more as the “senior partner” in the holding company Marcor, Wards was about to become a division of a company many times its size.

As mentioned, Mobil Corporation, known at one time as Standard Oil Company of New York, was in 1974 the country’s third largest oil firm and seventh largest company overall. In 1973, Mobil acquired 4.5% of Marcor’s (corporate parent of Wards and Container Corporation of America, a packaging company) stock on the open market, more-or-less flying under the radar of the press and government regulators alike. In June 1974, Mobil went public with its desire to acquire control of Marcor, with the stated goal of diversifying its business.

It could easily be said Mobil’s timing wasn’t the greatest - trying to invest profits outside of oil exploration when the oil crisis of 1973-4 was still vying with Watergate in the headlines. In fact, the shortage had technically been “over” for only a couple of months at that point, and the resultant higher gas prices were here to stay. Reading then-current newspaper and magazine articles about Mobil’s offer to buy Marcor, though, you get the feeling their execs knew exactly what they were about to get into.

Expected as it was, the political backlash was indeed strong – Wisconsin congressman Les Aspin, according to the Chicago Tribune, warned that a merger “would result in a restraint of trade” since Montgomery Ward also sold tires, batteries, auto accessories and gasoline (in some cases) at its auto centers. Senator Thomas McIntyre of New Hampshire was “absolutely outraged” that Mobil would “spend three-fifths of its last year profits to buy a non-energy enterprise.” Minnesota Senator (and soon-to-be vice president) Walter Mondale was quoted as saying the transaction “clearly indicate(d) the big oil companies don’t know what to do with their excess profits.” As late as April 1979, according to Business Week, President Carter weighed in on the Mobil/Marcor merger (which had actually occurred months before Carter was even elected to the presidency), citing it as a textbook example of the need for a windfall profits tax on the major oil companies.

Despite this, Mobil pressed forward with a tender offer for 51 percent of Marcor, with the blessing of Marcor’s upper management, conditioned on the fact that Mobil would allow Marcor’s existing management to run the day-to-day operations. In August 1974, the merger was consummated, although the U.S. Justice Department would continue to review it. Wards now had a “rich uncle Mobil”, according to the Chicago Tribune. In March 1976 Mobil (which already owned 54 percent of Marcor at that point) moved to acquire the rest of the company, and three months later the deal was finally done.

For the first couple of years following the Mobil merger, Montgomery Ward, still riding a wave of success that started in the early 70’s, contributed respectably to their new parent company’s profits. By 1979, however, things had taken a sharp turn for the worse, aided in no small part by the dismal economic conditions (with a second oil crisis topping the bill) that characterized that year. Another problem had its seeds in Wards’ initial turnaround strategy of the early 1960’s, and only became apparent over time – the company’s continual desire to emulate Sears. Indeed, nearly all of Wards’ key management had come from Sears, their desire to one-up the ol’ alma mater fueled by a strange mix of admiration and revenge. For many of those years it was a valid strategy, while Sears cruised along from strength to strength through the 60’s into the early years of the following decade - definitely a style to follow. Problem was, by 1979, Sears was having huge identity problems of its own, and both Sears and Wards were facing intensified competition from specialty stores, home centers and the Relentless Advance of the K-Monster.

Alarmed by these developments and eager to protect their investment, Mobil stepped in “with a new financial package and encouragement to proceed with a markedly different marketing strategy”, according to a July 17, 1980 Business Week article. The financial package was an interest-free $200 million “loan”, and the marketing strategy involved a small company that Wards had purchased back in 1973 – Miami-based Jefferson Stores, Inc., a discount store chain with seven stores at the time Wards bought them out. “React(ing) as if Jefferson were the retail equivalent of an oil strike”, as Business Week later put it, the mandate from Mobil was clear – “high quality discount units”, along the lines of Dayton-Hudson Company’s Target stores, would be Montgomery Ward’s future.

Whatever their behind-the-scenes reservations may have been, the Wards executives were on board, at least publicly. “The mass merchandiser has been doing poorly in comparison with the discounter, so we’re making a major change in our strategy” said Gordon Worley, Wards’ executive VP, and CEO Ed Donnell went so far as to praise checkout lanes, long a staple of discounters and anathema to department stores – “There is no question that the public likes a checkout store, assuming the store does a good job of categorizing merchandise and providing help where it’s needed”. Within 18 months, Mobil had quintupled the size of the operation, now called Jefferson Ward, to over 40 units, an “unprecedented expansion in retailing” as Business Week put it. Plans were in place to convert one-third of Montgomery Ward’s existing stores to the Jefferson Ward model.

The result, unfortunately, was chaos. The burden of servicing the new stores fell to the tiny Jefferson staff. Overwhelmed by the hugely increased store count, mistakes were rampant. Stores received “too many or too few goods”, according to Business Week, and the Jefferson people had no experience in dealing with the furniture, high-end apparel and other unfamiliar Ward staples they were now “forced” to carry. On top of that, the chain’s expanded geographic footprint (into brutally competitive markets such as Philadelphia and portions of New Jersey) posed new problems for the Jefferson buyers, who were used to stocking for balmy South Florida climes. Winter coats, for example, arrived on the racks of Jefferson Ward’s new Northern stores a month after the winter selling season began – and that’s exactly where most of them stayed. The net result was that Jefferson had turned from “a small moneymaker” to a fairly good-sized loss operation. The strategy that was supposed to save Wards’ bacon was burning it.

Flummoxed, Mobil turned to someone outside the insular Sears/Wards universe to set the ship right. In March 1981, the company appointed Stephen L. Pistner as president of Montgomery Ward. Pistner, who held the same position at Dayton-Hudson Corp. at the time he was recruited to run Wards, had a heavy claim to fame in the retail world. In 1973, Pistner became head of that company’s Target discount store division, an operation with great potential but sorely lacking in direction. Pistner was instrumental in fostering the culture and sense of style (right down to advocating the stores’ pervasive red color scheme, against all conventional wisdom of the day) that laid the foundation for Target’s current success. Reputed for straight talk, Pistner “was attracted to strong personalities (in managers)” and allowed them considerable latitude “as long they delivered”, he told author Laura Rowley, author of the book On Target.

Upon arriving at Wards, Pistner soon learned that the company’s turnaround strategy “was poorly researched, ill-defined and miserably executed” as Business Week phrased it, and he immediately killed the plans to convert 115 standard Montgomery Ward stores to the Jefferson Ward format. Instead, the new Wards image would be that of a “hybrid merchandiser”, with “the operating disciplines of discounting and the presentation concepts of specialty merchants”, precisely the two types of competitors that were giving the company fits at the time.

There would be changes in the merchandise mix as well, with a greater emphasis on “lower-margin, high turnover items” such as health and beauty aids, and a move away from big-ticket items. Pistner instituted a “never-out” policy for 1000 core items, presumably a legacy of his Target days. He also commissioned a study of Wards’ customer base that yielded some interesting results –an unexpectedly loyal following of 25-to-40 year old shoppers, for one. “We are loaded with young customers but are not supplying them with what they want”, a “Ward insider” told Business Week. To address the issue, Wards set plans to beef up their offerings of such items as children’s clothes and young adult sportswear, including a Summer 1981 promotion of Izod alligator-logo shirts for a jaw-dropping 19 bucks apiece. (Sure wish I’d heard about that 29 ½ years ago. I could never afford ‘em at regular price, and settled for the JCPenney “Fox” knockoffs instead, in clear violation of the tenets set forth in The Preppy Handbook. Honks me off just thinking about it.)

In late 1982, the company’s 15-year-old “blue bar” logo was retired in favor of a new image. Whereas the old logo featured a smaller-type “Montgomery” stacked over a much larger-type “Ward”, the new logo featured the name “Montgomery Ward” horizontally, typeset in gray Serifa Bold over a burgundy underscore, although there would be several color variants of both in the ensuing years. The goal was to return the emphasis to the company’s full name, according to Chicago Tribune business columnist George Lazarus, who quoted the company’s design director: “Wards is not a unique name in the marketplace. Montgomery is what gives our name distinction”. (My thoughts exactly.)

Two years into Stephen Pistner’s reign, in early 1983, Wards was still losing money and borrowing heavily from its parent company, Mobil. The costly shift in merchandising approach and a host of painful cutbacks (including nearly one-fifth of the company’s employees) were not yet yielding dividends, and rumors swirled that Mobil had lost patience and would soon dump Montgomery Ward. Still, Pistner was adamant in comments to the Chicago Tribune in a March ‘83 article - 1984 would see the company would finally go into the black.

Throughout 1983, nearly 60 existing Montgomery Ward stores received the “Impact II” renovations and a number of new ones, including a 153,000 square foot store at Chicago’s Ford City Mall on Chicago’s southwest side, were opened. As Tribune writer Janet Key noted, however, Wards was far from alone in debuting a “new look” at the time, with Sears eagerly rolling out its “Store of the Future” concept and JCPenney scrapping auto centers and hard goods in favor of fashion.

It must’ve helped though, as Pistner’s profitability prediction (the “Triple-P”, as it were) did come true, with the company posting its first annual profit in 5 years and best Christmas season in longer than that, a January 26, 1984 Tribune article attested. He attributed the chain’s greatly improved performance to the new store designs, which emphasized the “Seven Worlds of Wards” - apparel, automotive, home electronics, home furnishings, appliances, home improvements, and recreation and leisure. The remodeling program would extend through the new year, affecting 65 more stores, and Pistner noted that the focus would now turn towards the company’s 48-store Jefferson Ward chain. “There’s nothing wrong with the basic strategy of upscale discounting, but (Jefferson Ward) is a little out of whack”, he told the Tribune. “It needs to be corrected the way Wards was corrected”.

But by the end of the year, he was gone. On the last day of 1984, it was announced that Pistner had resigned to accept the CEO position at McCrory Stores, the dime store division of Rapid-American Corporation. Speculation as to why he left, of course, was rampant – the possible reasons including frustration at dealing with oil executives as opposed to retail people, or perhaps a sense that his task of returning Ward to profitability was complete and it was time to move on. For his part, Pistner simply said he had received “an exceptional offer”. At McCrory, Pistner would oversee the purchase of the Kresge and Jupiter chains from Kmart Corporation. In 1987, after a falling out with Rapid-American chairman Meshulam Riklis, Pistner resigned. In 1990, he became chairman and CEO of bankrupt Ames, enduring two undoubtedly miserable years there.

To replace Pistner as head of Montgomery Ward, Mobil hired Bernard Brennan, president of Household Merchandising Inc., the parent company of Ben Franklin and T.G. and Y. variety stores and Vons, the Los Angeles-based supermarket chain. This was Brennan’s second tour of duty at Wards, having served previously as a vice president under Pistner. Much of his career, however, was spent at Sears, Roebuck and Co., where his father, grandfather and notably, brother – had worked. I say notable because his brother, Edward Brennan, had recently been appointed CEO of Sears. The Brennan brothers, both heading up legendary yet troubled retailers, were the subject of a great many business stories during the 1980’s as one might expect.

In 1985, with a degree of stability achieved, Mobil began to seriously consider selling off Montgomery Ward. For over two years, Ward had not required additional cash from Mobil, the new merchandising strategy was largely in place, and some of the painful cuts had already been made, including a tiny subsidiary that few knew about – unless you were a kid growing up in the Chicago area, that is. In 1973 Wards had purchased the Golden Bear Restaurant chain, a group of 21 pancake houses throughout the Chicago area, with headquarters in northwest suburban Mount Prospect. I remember these with great fondness, and one thing still stands out after all these years - the napkins, with pictures of “Golden Bear”, stacks of pancakes, and a little song printed on them: “Golden Bear, Golden Bear, it’s a honey of a place where food is fun”, complete with a staff and musical notes. Although I couldn’t read music at that age (not that I’m great at it now), I always had a tune in my head that fit the words. In mid-1984, Wards sold the chain to PepsiCo, who converted many of the locations to Pizza Huts and dumped the rest. Guess I should have saved one of those napkins.

More painful cuts were to come, though. One of those was the discontinuance of the company’s legendary 103-year-old catalog, for decades the very foundation of the business. As Ward president Bernard Brennan was quoted in the New York Times, “Frankly, we see no promise of improvement in our catalogue segment” (“Catalogue” – heh. But this is the Times, you know.) The last Wards catalog was set for December 1985 release. Of course there was the sticky issue of what to do with Wards’ 1,250 small catalog stores, franchised for the most part to mom-and-pop operators. A number of these opted to join a new cooperative formed by former Ward executives called Amity Associated Stores. (I wasn’t able to find much information on these, and can only assume they weren’t around long.) The company’s Jefferson Ward unit, which had gone from panacea to pariah in a relatively short span of time, was also put on the block. In June of 1985, Jefferson’s 18-store Northern Division was sold to Stop & Shop Companies, Inc., for conversion to Bradlees stores.

With most of the subsidiaries and peripheral businesses gone by the end of 1985, Montgomery Ward, then consisting of 300-plus full-line or nearly full-line stores, embarked on a “specialty store” approach, sort of an intensified version of the “Seven Worlds of Wards” with fewer worlds (hardware, plumbing, lawn and garden and toys were now history, according to a New York Times article). They emphasized branding this time - “The Store for Kids” was one, complete with a six-foot tall dinosaur (a little unintended symbolism there?) at the department entrance. “The Appliance Center”, “Home Ideas” and “Auto Express” were others, but the best remembered one today would have to be “Electric Ave.”, Wards’ new moniker for its home electronics department. Not sure what it did for Wards, but no doubt it extended Eddy Grant’s fame by a few years. There were also some unusual joint real-estate ventures – when the company renovated its Gaithersburg, Maryland store, for example, it leased 30 percent of the store’s space to Toys R Us.

Throughout this period, Montgomery Ward’s financial condition continued to improve, firmly convincing Mobil that the time was right to sell. The leading contender, according to Times business columnist Isadore Barmash in a January 1988 article, was Wards’ own management, led by chairman Bernard Brennan. As it turned out, Brennan, who was credited with the company’s sustained prosperity, was a friend of Jack Welch, the legendary chairman of General Electric Company. Welch spearheaded GE’s purchase of RCA (and its television network subsidiary NBC) and moved the company into financial services in a huge way through their GE Capital division, among many other accomplishments. As long as Brennan remained at Montgomery Ward’s helm, the prospects of a GE-financed management buyout were golden. On March 7, 1988, the sale was completed for $3.8 billion.

Through the 1990’s, unfortunately, the company steadily lost focus (and money), and by the end of the decade it was clear to all that the wheels were off the thing. One bad decision followed another – a re-entry into the catalog business through a joint venture with Fingerhut, 1991. A buyout of troubled electronics chain Lechmere, 1994. A 19.6% stake in doomed furniture chain Levitz, 1995. Buying Amoco Motor Club, 1996. The cherry on top came in a May 21, 1996 New York Times article – “Montgomery Ward May Consider Selling Its Retail Stores”. The Montgomery Ward stores, that is. No one was interested in the chain itself, which was understandable considering its dismal performance, although the article mentioned a likely willingness by Sears to snap up Wards’ better store locations.

In July 1997, under the weight of heavy losses and looming debt, and despite cash infusions from GE Capital along the way, Montgomery Ward declared bankruptcy. In November of that year, 47 stores were closed, with more to follow, sadly. In 1999, another new logo was rolled out, but by that time a majority of the buying public had written Wards off, and with the chain’s reduced store base of 250 units, it was an option for fewer and fewer shoppers anyway.

On December 28, 2000, after 128 years in business, Montgomery Ward closed its doors for the last time. The eulogies poured in, highlighting the key moments in Wards history- an integral part of America’s own. There was even a spot on the New York Times editorial page, a rare honor for a retailer.

It has often been said that Wards never really recovered from its voluntary period of stagnation in the 1940’s and 50’s. That the chain fell behind its competitors and permanently lost its standing with the American buying public, despite efforts great and small over the following decades. I tend to agree with this view, to a point. But I also know, from my own personal experience and that of others as expressed on this website and in conversations, that many of us have cherished memories of shopping at Montgomery Ward. For us, in that time and place, it mattered.

The photos above are various publicity shots from Wards’ Mobil-ownership period, mostly from 1974, locations unknown. (Thanks to readers Scott and Kenney for identifying the Wards store pictured in the third photo as the South Park Mall location in Shreveport, Lousiana. The mall has since closed and now houses the Summer Grove Baptist Church. The mall's JCPenney store is now the main sanctuary and the Wards store is a cinema venue for Christian themed-movies. Thanks again to you both for this update!) The last photo depicts the Richardson Square Mall (Dallas area) location, which opened in July 1977. Below, a typical Jefferson Ward store from 1980 and a “new look” Wards (ahem, Montgomery Ward) interior entrance circa 1985.
Thanks for everyone’s patience through this long stretch between posts. Yes, I’ve been busy, but your loyal readership means a lot to me, and I hate letting you down. After all, to paraphrase the Wards guy, it’s not the Pleasant(ness) or even the Shopping that gives us distinction, it’s the Family!

Thursday, September 30, 2010

"Have A Nice Day" at Wards!

“Like, wow, Montgomery Ward!” read the headline in a March 1970 Business Week article. The article chronicled Wards’ quest for relevance with the coveted 18 to 34 age bracket, and by all appearances they were starting to break through. These efforts encompassed both of Wards’ main lines of business – the legendary catalog and the (now almost exclusively mall-based) stores.

On the catalog side, Wards’ management took a bold step, shoving aside their standard phone book-sized biannual catalog to issue a special 75-page fashion-only edition aimed at the young adult market. The company bypassed their staff copywriters in favor of an outside advertising agency (sparking a minor mutiny that unfortunately reached the press) and photography by Victor Skrebneski, the world famous Chicago-based fashion photographer. The catalog, with pages “crowded with flower-generation youths and pearly-toothed girls facing front and looking ‘now’”, featured the following opening text as quoted by Business Week: “There’s never been a generation like this one before…This generation wants something different out of life. And it’s going to get it.” (Looks like I’m not the only one who likes to begin sentences with “and.”) In Chicago, Wards took the expensive step of introducing the catalog in a 90-minute TV special that would feature “a lot of skin” according to a beaming Skrebneski. The catalog was an unprecedented success, with 50 percent of orders coming in to Wards via direct mail versus the normal 15 percent. “…about half the sales (were) in women’s fashions, predominantly sportswear.”

This was coupled with a hip new approach to store merchandising, perhaps nowhere more so than the “glossy new chrome-and-Day Glo boutique” Wards opened in Sandburg Village, “a multi-stewardessed, young-executived apartment complex on the Near North Side”. (I guess the proper term today would be “multi-flight attendanted.”) Sandburg Village, a set of nine massive, modern high-rise apartment buildings that opened in 1963, had a somewhat controversial origin. A high-profile urban renewal project for which blocks upon blocks of old buildings were leveled (the entire expanse between Clark, LaSalle and Division streets and North Avenue), the goal of Sandburg Village was to stem the flow of middle-class residents to the suburbs. Although many of the buildings demolished to make way for the complex would today be candidates for historic preservation, Sandburg Village is looked back upon as an important factor in the city’s “hoped-for revitalization”, as author J. Linn Allen put it. In the early 70’s Sandburg Village was the epitome of Chicago trendiness, and I can remember my parents taking us to their huge annual outdoor art fair on a couple of occasions. I’d like to think that I looked at the various art pieces and thought “Hmm, I wonder if these are Miró or Braque-inspired?”, though undoubtedly it was more along the lines of “When do we eat?” Veering back on topic, the Sandburg Wards unit, with its hot fashions and “psychedelic light displays” was another success.

The new look was not restricted to a handful of special units, but was soon rolled out nationwide. By 1972 many stores sported the Wards equivalent of rainbows, sunrises and smiley faces. These changes coincided with a new type of store construction that Wards termed the “modular” format. These stores, the first of which opened in Rockford, Illinois in 1970, were built using a special process of prestressed concrete (manufactured by a subsidiary of Wards) that cut the construction time of a typical Wards store in half, according to a November 1970 Business Week article. With somewhat smaller square footage than the huge stores the company had been building, large appliances and other items such as riding lawn mowers were displayed as floor models, with customer purchases shipping out from a centralized warehouse instead of the store. Fifteen “modular” stores were opened in 1970, with plans for 24 more in 1971 and 30 more in 1972. Certainly this was an important development in Montgomery Ward’s race to compete with Sears and JCPenney.

1972 also saw the celebration of Wards’ 100th Anniversary and the kickoff of the “Century 2” advertising campaign, a year-long series of special promotions that met with brutal price competition from Sears and Penneys. As expected, the occasion called for a commemorative book, but in Wards’ case, two books saw the light of day. The first, entitled “1872-1972: A Century of Serving Consumers – The Story of Montgomery Ward”, was a nice bit of puffery, a slim softcover book filled with sepia-toned photographs, “official version” history and an optimistic eye toward the future. The second, far more interesting, book was “Satisfaction Guaranteed: An Unconventional Report to Today's Consumers” by freelance writer Booton Herndon. Over a two-year period, Herndon was given up-close access to Wards’ top executives, but also spent a great deal of time in the trenches with middle managers, store employees and customers. The resulting 300-page book, described by Business Week as “an unabashed defense of mass merchandising at a time when business (was) taking its lumps from consumerists”, was a brutally frank look at the business, the challenges it faced, and the sea change in consumer mentality that characterized the early 70’s. Filled with surprisingly candid revelations and occasional salty language, it proved to be a bit more than Wards executives bargained for, and certainly wasn’t what one would expect from a commissioned book. Entertainingly written, it’s one of my all-time favorites in the field.

“Century 2” got off to a roaring start for Wards, who racked up the strongest sales figures (and a 45% increase in earnings) in their history in 1973. The painful, 15 year-long process of rebuilding the company finally began to pay off. For the first time, every one of the company’s 22 metropolitan districts posted a profit. The smiley faces, rainbows and sunrises took residence in the Montgomery Ward boardroom, however, when the big news rolled in – Wards’ smashing performance as compared to their two main rivals. Wards’ sales for the year were up 22 percent compared to Sears 12 percent, and the all-important Christmas sales figures that year reflected double the sales gain over both Sears and JCPenney. Wards president Ed Donnell tipped his hand in a June 1974 Newsweek article – “…we’re not out to catch Sears or Penney, (but) we will certainly narrow the gap…Our goal is to be held in high esteem by our competitors and our customers.”

At first, the wording of Donnell’s statement (listing “competitors” first) struck me as a bit odd, but in light of one of the article’s other points it makes sense. Montgomery Ward was now in the enviable (and for them, unusual) position of being an attractive prospect for high-profile shopping center projects, even those developed by direct competitors. Only a few years back, they were frequently spurned “because of (their) reputation for cheap goods and stodgy merchandising,” according to Newsweek. Clearly, Wards’ “increased esteem” amongst their competitors was opening new doors of opportunity.

As it turned out, shopping center developers weren’t the only ones attracted by Wards’ recent triumphs. In 1973, Mobil Oil Corporation, America’s third largest oil company (behind Exxon and Texaco) and 7th largest company overall, began to secretly acquire the common stock of Marcor, Montgomery Ward’s parent company. Within months, Mobil had amassed nearly five percent of Marcor’s stock, and were hungry for much more. Sunrises, smiley faces and rainbows weren’t part of their game plan.

These publicity photos are from 1972, that most 70’s-ish of years. (I tend to look back at the 70’s as having three distinct eras – the early 70’s were the “real seventies”, the mid-70’s were the “nondescript but the Bicentennial was cool and comic books were still 25 cents” era, and the late 70’s were “the era that should be renamed the ‘Pre-80’s’”. Glad I could help sort this out for you!)Top to bottom, they feature a typical in-mall store entrance and the sportswear department, “The Chain”, a casual menswear department (reportedly a favorite of Lindsey Buckingham), a hip juniors department entitled “Reflections” (With a sign typeface known to graphic designers as Peignot and to the rest of us as “that Mary Tyler Moore font”.) Next up is “Tiny World” (Are they mannequins or real children? Aaiiiee!!) Then, the canary-yellow “Party Papers” stationery department. (I mean the department decor is canary yellow, not the stationery itself. Well, some of it might have been… but I think you know what I’m trying to say.) After that, a very colorful small appliance area, the obligatory shag carpet headquarters, and the large appliance department, filled with shades of Harvest Gold and Wheat. The outdoor power department is next, from an era when lawn tractors looked like… tractors. After that, a barbecue grill display. I’m not sure that putting a plant on top of a grill is a great idea, unless you’re trying to dry it out. Oh, you’re right, this was the seventies. Lastly, the furniture department, arranged in tasteful living room groupings. But taste is an individual thing, I guess…

Thursday, September 9, 2010

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!