Post War
After World War II, Sewell Avery believed the country would fall back into a recession or even a depression. He decided to not open any new stores, and did not even permit expenditure for paint to freshen the existing stores. His plan was to bank profits to preserve liquidity when the recession or depression he anticipated hit, and then buy up his retail competition.
Without new stores or any investment back into the business, Montgomery Ward declined in sales volume compared to Sears. Many have blamed the conservative decisions of Avery, who seemed not to understand the postwar years' changing economy. As new shopping centers were built after the war, Sears was perceived to have better locations than Ward. Nonetheless, for many years Ward was still the nation's third-largest department store chain.[12][13]
In 1955, investor Louis Wolfson waged a high-profile proxy fight to obtain control of the board of Montgomery Ward. The new board forced the resignation of Avery. This fight led to a state court decision that Illinois corporations were not entitled to stagger elections of board members.[14]
In 1961, company president John Barr hired Robert Elton Brooker to lead Montgomery Ward as president in its turnaround. Brooker brought with him a number of key new management people, including Edward Donnell, former manager of Sears' Los Angeles stores.
The new management team achieved the turnaround, reducing the number of suppliers from 15,000 to 7,000 and the number of brands being carried dropped from 168 to 16. Ward's private brands were given 95 percent of the volume compared with 40 percent in 1960.
The results of these changes were lower handling costs and higher quality standards. Buying was centralized but store operations were decentralized, under a new territory system modeled after Sears.[15]
In 1966, Ed Donnell was named company president. Brooker continued as chairman and chief executive officer until 1976. In 1968, Brooker helped engineer a friendly merger with Container Corporation of America, the new parent company being named MARCOR.[16]
Despite the merger, the company continued to struggle into the 1970s. In 1973, its 102nd year in business, it purchased a small discount store chain, the Miami-based Jefferson Stores, renaming these locations Jefferson Ward.[17] Mobil, flush with cash from the recent rise in oil prices and looking to diversify, bought a controlling share of MARCOR in 1974, only to acquire the company outright in 1976.
The company was an early entrant in the home computer market with the CyberVision 2001 in 1978, developed by the Authorship Resource, Inc., of Franklin, Ohio, and primarily manufactured by United Chem-Con. However, mounting competition from other computer companies as well as manufacturing problems compelled the three companies to pull the plug on the CyberVision product by the early 1980s.[18]
By 1980, Mobil realized that the Montgomery Ward stores were doing poorly in comparison to the Jefferson stores, and decided that high quality discount units, along the lines of Dayton Hudson Company's Target stores, would be the retailer's future.
Within 18 months, management quintupled the size of the operation, now called Jefferson Ward, to more than 40 units in the Delaware Valley and Richmond metropolitan areas, and planned to convert one-third of Montgomery Ward's existing stores to the Jefferson Ward model.
The burden of servicing the new stores fell to the tiny Jefferson staff, who were overwhelmed by the increased store count, had no experience in dealing with some of the product lines they now carried, and were unfamiliar with buying for northern markets.
Almost immediately, Jefferson had turned from a small moneymaker into a large drain on profits.[19] The company sold the chain's 18-store northern division to Bradlees, a division of Stop & Shop, in 1985. The remaining stores closed.[20]
In 1985, the company closed its catalog business after 113 years and began an aggressive policy of renovating its remaining stores. It restructured many of the store layouts in the downtown areas of larger cities and affluent neighborhoods into boutique-like specialty stores, as these were drawing business from traditional department stores. In 1986, fellow MARCOR firm, Container Corporation of America, was divested by Mobil. This effectively dissolved the MARCOR division and left Montgomery Ward as a direct subsidiary of Mobil. Analysts saw the CCA sale as an effort to go back on their diversification efforts, as the debts incurred since MARCOR's acquisition began to weigh the oil giant down, and many predicted Montgomery Ward was next to be sold. These theories were confirmed in January 1987, when Mobil stated they would be looking into spinning off the company in the near future.
In March 1988, the company management undertook a successful $3.8 billion (~$ in ) leveraged buyout, making Montgomery Ward a privately held company.[21]
