CHICAGO — Besieged by competition from specialty retailers, Montgomery Ward, a progenitor of mail-order shopping that operated general merchandise stores in more than 30 states, is closing down after 128 years in business.
It was a somber day for the company's 37,000 employees and others who were quietly pulling for the department store chain that helped pioneer American retailing.
Montgomery Ward once operated a store in Salt Lake City on the southeast corner of 100 South and Main that closed in 1960. The building later became offices for the Genealogical Society of the LDS Church, then the headquarters of Tracy-Collins Bank & Trust, which later became West One Bank, then U.S. Bank. The building now is home to the Old Navy clothing store.
Utah currently has no Montgomery Ward stores, according to Joyce Pemberton, company spokeswoman. "The closest one is in Denver," she said.
Ollie Allen, a 40-year company employee who spent her last 10 years as a telecommunications supervisor in Chicago, said she was surprised to learn Thursday morning that she no longer had a job. Employees will receive severance packages.
"It's been a good company for me," said Allen, who was among the scores of Montgomery Ward employees filing out of the company's headquarters with boxes in hand after being told the news. "I sent three kids to college."
All 250 stores will close on Jan. 15, and the company's 10 distribution centers will close Jan. 17, according to a statement posted Friday on the company's Web site.
"It's too bad because a lot of effort has gone into trying to save the thing," said Sid Doolittle, a Chicago-based retail consultant who spent 28 years as a Montgomery Ward executive.
Hope had been rekindled in August 1999 when the company emerged from a previous stint of Chapter 11 bankruptcy, announcing a plan to revamp many of its stores.
But heavy competition — from chains ranging from Home Depot to Best Buy, Target and the Gap — proved to be too much for the veteran retailer.
"Sadly, today's action is unavoidable," Montgomery Ward CEO Roger Goddu said in a statement on Thursday, citing weak holiday sales as the clincher for the decision.
"You don't need to be an analyst to see that the retail market continues to be very unforgiving — in fact, it's bruising," said John Oliver, a spokesman for GE Capital Services, the subsidiary of General Electric that oversees Montgomery Ward.
Montgomery Ward's action came two days after Massachusetts-based discount retailer Bradlees Inc. announced that it, too, was going out of business.
Asked why Montgomery Ward was filing for Chapter 11 protection for the second time rather than a Chapter 7 liquidation, Oliver said it was simply a matter of procedure.
"It is clear that this is an orderly winding down," he said.
About a fifth of the Wards stores, including some in Chicago, had been updated. But some analysts said it was too little too late.
"Wards has not established themselves as anything distinctive in the marketplace," said George Whalin, president of California-based Retail Management Consultants. "There's just no reason to go there — unless maybe they're the closest store to your house."
But at least one electronics supplier said it wasn't all gloom and doom.
"It's not like they weren't doing well in some areas, like electronics," said Ronnie Goldfinger, senior VP of Highland Park-based Performance Marketing Inc., a manufacturer's representative that sold consumer electronics to Wards. "But it wasn't enough."
Montgomery Ward had been shooting for sales growth this year of about 9 percent. Instead, it hovered at a sluggish 2 percent.
Begun in 1872, Ward pioneered mail-order catalogs when it came out with a single sheet of dry-good items for sale. It was the first U.S. mail-order house to sell general merchandise. Sears, Roebuck & Co. was not founded until 1886 and did not put out its first general merchandise catalog until a decade after that.
The company opened its first store in Plymouth, Ind., in 1926.
Shoppers at a remodeled Wards store on Chicago's North Side were stunned at the announcement.
"It's really a shame," MaryAnn Wilson, 67, said. "There aren't hardly any department stores left; it's all specialty stores."
On the Net: Montgomery Ward: www.wards.com