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Montgomery Ward brand makes revival

Catalog marketer that bought name out of bankruptcy insists it is faithful to former department store's legacy.

Sunday, December 10, 2006

CHICAGO — There is life after death — at least in retail.

Five years after Montgomery Ward went out of business, its brand name has been revived on the Internet, and there's even a 21st-century version of the Ward holiday catalog that was standard fare in American households for decades at this time of year.

M. Spencer Green

David Milgrom: Private firm's president and founder.

M. Spencer Green

The Montgomery Ward department store chain went out of business in 2001, but a catalog owned by Direct Marketing Services Inc. has resurrected the name.

Without stores, this Ward is a bit different from the chain that thrived for more than a century until liquidating in 2001 after Wal-Mart Stores Inc. and other discounters and department stores left it badly out of fashion.

But Direct Marketing Services Inc., the catalog marketer that acquired the Ward name out of bankruptcy in 2004, insists it is faithfully carrying on a legacy that dates to 1872 when Aaron Montgomery Ward established the first mail-order business.

Many of Montgomery Ward's old vendors and products and several former employees are part of the new Ward, which sells 46,000 items online ranging from rugs to recliners and home electronics to Rudolph the Red-Nosed Reindeer yard art.

David Milgrom, the private firm's president and founder, notes that the cataloger shares Ward's Chicago roots and retail industry experience.

"As a retailing pioneer, Mr. Ward would be pleased to know that the tradition of excellence which he began continues in an exciting new way with," the Ward Web site proclaims.

Still, it's the famous brand name that the direct marketer is counting on most to draw shoppers.

In the fierce competition among retailers, industry experts say a trusted brand — even a heretofore dead one — can be half the battle.

"People are always open to believing that however wayward one got, even for a retailer, given proper management you can go back on the right track," said George Rosenbaum, chairman of Leo J. Shapiro and Associates, a Chicago-based retail consulting firm. "Ward's was a good enough name, so there's probably a good amount of hope or willingness to believe that they've come back."

Sue Montoya, a longtime Ward devotee who was "devastated" when her favorite chain shut down, says she was thrilled to get a catalog from the resurrected business this year. She promptly placed an order.

"I am sure that if my dear mother was still alive today, she would be just as excited, as she is the one who introduced me to the Ward's tradition," the 56-year-old Montoya said from her home in Denver.

Ward isn't the only moribund brand to get rehabilitated under new ownership.

FAO Schwarz toy stores, another century-old retailer that landed in bankruptcy after failing to keep up with the likes of Wal-Mart and Target Corp., reopened on New York's Fifth Avenue and in Las Vegas in 2004 after the failing company's remnants were bought for $41 million by D.E. Shaw Laminar Portfolios.

Pepsodent toothpaste, once the No. 1 U.S. toothpaste before fading into oblivion, was purchased by Church & Dwight Co. in 2003 from Unilever and now is a value brand sold in discount stores.

White Stag, a leading maker of ski clothing and sportswear dating to the 1930s and '40s, is an in-house brand at Wal-Mart after being bought from Warnaco Group Inc. in 2003.

Not everyone is taken with the brand-revival practice.

Sid Doolittle, a retired retail consultant who worked at Montgomery Ward for 29 years and was president of its catalog division, contends that bringing back the Ward name deceives customers who might not realize it's not the same company they knew.

"It's an old familiar name and there is a halo around the name with some people," he said. "This isn't the old reliable company at all. it's a company leveraging the name."

Milgrom takes exception to that characterization, noting that retailers change owners all the time.

He says his company adheres to the Montgomery Ward practice of offering affordable merchandise that's not readily available in retail stores with home delivery, a credit option and a customer satisfaction guarantee.

"We take great pride in offering a wide variety of quality products just like the original Ward's did," he said in an interview at the company's two-story offices. "We are in the same lines of business as the original Ward's, with many of the same suppliers. The overwhelming majority of customer responses are that they are so happy to see Ward's back."

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