History Timeline 2000's

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  • 2000 - Detail

    December 28, 2000 - Montgomery Ward, the retail giant since its founding one hundred and twenty-eight years before, announces its intention to cease business. Competition from newer, low-cost retail behemoths such as Wal-Mart lead to its demise.

    Montgomery Ward

    A shift from traditional store chains was beginning as the new century began. Wal-mart was becoming the behemoth on the block, testing the metal of long standing historical stores that had been around for over a century. And while some, like K-Mart, Sears, Penney's, and more would be able to withstand that charge, at least for the decade moment, even as they, too, started to struggle, in 2000, it was traditional retailer Montgomery Ward that took one of the first significant boots.

    By the year 2000, Montgomery Ward was a subsidiary of General Electric, and although it still had twenty-eight thousand employees in two hundred and fifty stores in thirty states, the retail giant for one hundred and twenty-eight years could not be sustained by the energy and manufacturing conglomerate. They would file for bankruptcy. One of the reasons given for their eventual demise, past the Wal-Mart phenomenom, was given in what seems like an odd statement. Their demise stemmed from a decision in the 1950's when their main competitor, Sears-Roebuck, decided to move into malls. Montgomery Ward, it is said, thought hoarding cash and waiting for the next depression was the best idea.

    They were on the downside after that decision and eventually a controlling interest was bought out by Mobil Oil in 1974. They closed down their catalog department by 1985. General Electric came on board in 1988, but that didn't work any better. They ended up owning it, but weren't particularly interested in retail. When sales plummeted into multi-hundred-million dollar losses per year, Montgomery Ward, the retail behemoth started by Aaron Montgomery Ward in 1872, was done.

    How Mongtomgery Ward Began

    It was August of 1872 and Aaron Montgomery Ward, a traveling salesman of Chicago, had an idea. He would start a one page catalog business with $2,400 and one hundred and sixty three items centered around farmers who need low cost goods. Bypassing the middleman of stores, the catalog would appeal to farmers outside the big metropolitan areas in small towns. He did not offer credit and there would be no haggling over price. He would, however, guarantee satisfaction or give the farmers their money back, which, by its first use in 1875, appealed to the thrifty rural customer after the Panic of 1873. His first two partners bailed during that year.

    How did these rural customers get their goods? Usually be picking them up at the railroad station. Ward turned the company into a private corporation in 1889 and withstood the Panic of 1893 well. 1893, however, was a pivotal year. Its main competitor over the next seventy years, Sears, was founded that year. Three years later, Sears started their own catalog.

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    Growth of Montgomery Ward

    By 1885, the catalog now known as the "Wish Book" was two hundred and forty pages in size with ten thousand items. Even with competition from Sears, which would surpass Montgomery Ward in size by 1900, Ward had $8.7 million dollars in sales in 1900. By 1904, they were sending out three million catalogs per year.

    Ward remained a purely catalog business until 1926, seven years after taking the company public. Their first store was located in Plymouth, Indiana. Within four years of opening their first stores, they had five hundred and fifty-six across the nation. Sears even wanted to join forces in 1930; Montgomery Ward declined. Retailer Montgomery Ward became industry standard and advertising geniuses. In 1939, Rudolph the Red-nosed Reindeer was penned in one of their campaigns. By the end of the Great Depression, which Ward's leaders had withstood by hoarding cash and limiting store expansion, they were at their height. Leadership decided after the boom of the war years, however, that another depression should be anticipated. This time, with Sears expanding to those suburban malls, and Montgomery Ward sticking with downtown locations on main streets while the suburbs exploded, it did not work, despite still having $1.53 billion in revenue in 1996 and three hundred and ninety stores open.

    But that, however, was not the end of the story. In 2004, Montgomery Ward was relaunched, as on online catalog company headquartered in Iowa, albeit in a much smaller fashion, and usually known as Wards. It is thought of as a separate entity to the first venture. Today that company is a small competitor to its rivals who essentially put the first incarnation out of business, Wal-Mart and Target.

    Photo above: Stereograph of the Montgomery Ward store (catalog center) in Chicago, 1906. Courtesy Library of Congress. Below: Montgomery Ward catalog center, Date Unknown, Historic American Buildings Survey. Courtesy Library of Congress. Info sources: Wikipedia Commons; Library of Congress; "Montgomery Ward to Close Its Stores," December 29, 2000, Leslie Kaufman and Claudia H. Deustch, New York Times; "Wards Profits Grow, Despite Fall in Revenue," July 16, 1996, Chicago Tribune; Britanica.com.

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