Montgomery Ward & Co. is considering shutting down its 300 catalogue stores in a move that could mean the elimination of at least 1,200 jobs nationwide.
The struggling Chicago-based retail giant said it is converting the catalogue stores to a direct-mail-order system with a toll-free telephone number. Although some catalogue stores may remain open, most will be closed by mid-1986, said Charles H. Thorne, a company spokesman.
"It is possible that every company-owned catalogue store will eventually be closed," Thorne said.
The 112-year-old company, which has been a division of Mobil Oil Corp. for the past decade, said the change was part of a recent effort to streamline operations by dropping unprofitable lines and adding new services.
"This will be more efficient for the company and its customers," Thorne said. "It will eliminate extra costs for the company. Customers can order directly through the 800 number and know immediately whether the ordered item is in stock."
Montgomery Ward, the nation's sixth-largest merchandise retailer, reported a profit of $40 million in 1983, its first annual profit since 1979. But in the first nine months of 1984, the company lost $16 million.
Company officials said last month that they expected to make enough money during the crucial Christmas season to show a profit for the entire year, but annual figures have not yet been made available. Montgomery Ward's yearly sales are about $6 billion.
The company has formally announced the planned closing of 30 catalogue stores. Closings already have begun in Oklahoma, Wyoming, Minnesota and California. The closings will affect only company-owned catalogue stores, however. Another 1,500 privately owned and operated Montgomery Ward catalogue stores, which are run on a commission basis, will not be affected by any closings.
Most of the catalogue stores scheduled for closing are in small towns that have no Montgomery Ward store. Each outlet employs between 4 and 25 people, so the number of workers laid off could exceed 1,200, Thorne said. "More jobs could be lost depending on how many stores are closed," he added. No decision has been made on whether to sell or sublet the properties.
Although no Washington or Baltimore-area catalogue stores are scheduled to close, Thorne said they may be shut down in the future.
Employes affected by the shutdowns will get preferential treatment in finding other positions within the company, Thorne said. But he added that most catalogue stores are not near Montgomery Ward retail outlets, so employes would have to be willing to move.
The closing of the catalogue stores comes about a week after Stephen L. Pistner suddenly resigned as president of Montgomery Ward to become chairman of McCrory Corp., the retailing subsidiary of Rapid-American Corp. of New York. A successor to Pistner has not been named.
Ward's decision to close the stores was part of Pistner's recovery plan for the firm, Thorne said. When Pistner joined Montgomery Ward nearly four years ago, he was given the job of reviving the financially beleaguered chain.
As part of Pistner's plan to turn the company around, Montgomery Ward has closed unprofitable stores and introduced popular brand-name goods to the merchandise line, including Sony electronic equipment, Maytag appliances and Michelin tires. Those moves have been credited with attracting customers who normally did not shop at Montgomery Ward.
The company also has eliminated unprofitable merchandise such as men's suits and carpeting, while modernizing and upgrading the interiors of one-third of its retail stores to make them more attractive. The retail chain has 322 Montgomery Ward outlets and 44 Jefferson Ward stores.
"The closing of its catalogue stores is another example of Montgomery Ward reducing the cost of doing business and enhancing the returns on its investment," said Edward Weller, an analyst at E. F. Hutton & Co.
Montgomery Ward has been a big money-loser for most of the time Mobil has owned it. There has been recurrent speculation that Mobil would like to sell the business, which has more than 100,00 employes, including part-timers.