Aaron Montgomery Ward is widely credited for saving Chicago’s lakefront for its citizens by his battles at the turn of the century to prevent development on the shoreline.
A hundred years later it is his storied namesake company that needs saving. Montgomery Ward & Co. is pressed by a debt load that includes $1.4 billion owed to banks and insurance companies that comes due in August.
It has been trying unsuccessfully to sell its Signature Group direct-marketing unit to raise as much as $1 billion.
Losses have mounted for the 400-store chain as consumers stayed away from its mix of discounted consumer electronics, cheap apparel and appliances. It lost $237 million on sales of $6.6 billion in 1996, posted a $141 million loss in this year’s first quarter, and said that it expects to lose $250 million in the first half, which ends Monday.
Thus, it was no surprise last week that headquarters cutbacks were announced. But staffers and retail observers were shocked when 400 employees, or 20 percent of the staff, were fired. Some analysts suggested that it wasn’t fat but muscle that was being trimmed.
More cuts could be coming. Wards, under pressure from 50 percent owner GE Capital Corp., said it is considering selling or closing some of its poorer-performing stores.
