Just a few years ago, Montgomery Ward's idea of fashion included elastic-waisted pants (eek!) and faux-wood entertainment centers (run away!).
But the retailer's store in Springfield feels like a new place. The name has changed -- Wards, not Montgomery Ward. The white floor tiles are crisp and new. The building has been painted. The store is stocked with items that customers say they're more likely to put on their bodies and in their homes.
"It's a different place," Martha Corprew said as she shopped at the store earlier this week. "Before, it was like, `Why?' "
As Montgomery Ward & Co. of Chicago prepares to emerge from bankruptcy protection later this summer, the 127-year-old retailer is offering trendy apparel and home furnishings. At the same time, it is spending up to $2 million a pop to renovate 40 of its 252 stores nationwide, including five of its nine stores in the Washington area. Workers are completing the renovations at Springfield, Falls Church, Annapolis and Laurel. A store in Waldorf will be revamped by October.
Executives say they're encouraged by the results. So far, they say, sales at the renovated stores are 40 percent above the chain's average. But no matter how spiffy its stores now seem and no matter what this retailer calls itself, its future is still hazy.
Like J.C. Penney and Sears, Montgomery Ward has found itself trapped in the mushy middle area of retailing. Shopping habits have polarized, with many customers making same-day trips to Wal-Mart on the low end and Nordstrom the high end. Others have opted for Target and Kohl's -- hybrids that position themselves somewhere between discounters and department stores.
"The middle has been a tough place to be," said Stephen Latz, an analyst with the investment firm A.G. Edwards. "In this environment, it's neither here nor there."
Among its peers, Montgomery Ward is definitely the sickest. And its losses are piling up, even as it attempts to emerge from two years of operating under Chapter 11 bankruptcy protection. It reported a $106 million loss in the first quarter ended April 3. Although that's an improvement over a $141 million loss in the year-earlier period, it's a sign that a turnaround is still far away for Wards.
Meanwhile, sales in the quarter dropped 5.6 percent, to $729 million from $772 million, though that decline reflected the closing of 39 stores. Same-store sales -- an industry barometer that measures sales at stores open more than a year -- rose 3 percent during the period.
Industry observers question whether there will be enough money in Montgomery Ward's coffers to renovate all of its stores over the next several years, although company officials say they plan to do so. In the Washington area, the company will need to upgrade its four other stores -- Temple Hills, Hyattsville, Manassas and Wheaton.
Even more cash, observers say, will be needed to market to shoppers who have snubbed the company during the past decade. "If they're not really rejuvenated, and if they don't have a clearly new profile to communicate to the consumer . . . I'd say it's all over," said Sonny Seals, a retail consultant with A.T. Kearney in Atlanta.
Montgomery Ward, however, continues to surprise the industry. In February, the retailer stunned critics by announcing that it would attempt to emerge from bankruptcy protection. General Electric Capital Corp., its largest creditor, will acquire all of Montgomery Ward.
Then came the new store design -- which shoppers and analysts applaud.
The new design features wide aisles, with a "racetrack" design that allows customers to view most of the merchandise without having to wander aimlessly. And so far, managers have resisted the urge to cram every available space with sales racks and big signs -- a pet peeve of many consumers.
In place of ordinary towels, there are Egyptian cotton cloths in hues of bronze and smoke. The apparel is trendy and easy to match. On the racks are styles similar to what you'd see at Old Navy or Abercrombie & Fitch: khaki capri pants, short A-line skirts and sweater sets with 3/4-length sleeves.
"Two years ago, we would have had this . . . but a year late," said Martin Nobles, manager of the Springfield store.
After years of giving Montgomery Ward the cold shoulder, shoppers say they're beginning to warm up. Corprew, an Alexandria resident, said Montgomery Ward stores were so cluttered that she rarely found what she wanted. But at the Springfield store this week, she said she was enjoying her shopping spree.
Pamela Cunningham, a homemaker from Alexandria, said the selection of clothing has gone from "old fogey and homely" to fashionable. "Now look at this shirt," said Cunningham, waving a gray, fitted T-shirt. "Isn't this cute?"
Montgomery Ward, the seventh-largest department store chain in the nation, has faced many crises since it was founded in 1872. In 1985, when Montgomery Ward was part of Mobil Corp., the retailer discontinued its catalogue and laid off 5,000 employees. Three years later, Mobil sold the company to a management group led by Bernard Brennan and GE Capital.
Still, the retailer floundered. It filed for Chapter 11 bankruptcy in July 1997.
Even as it struggles to win back consumers, Montgomery Ward will have less of a challenge in the Washington area, company and local real estate officials said. Most of the retailer's stores in this area are in strong locations.
Said Peter H. Framson, a principal with the real estate firm Trammell Crow Co. in McLean: "No matter how bad it has been, and in some markets they have completely shuttered their stores, this has been a good market for them. . . . . They've held their ground very well."
CAPTION: The renovated Wards store at Springfield Mall features the expansive new "racetrack" design that takes customers on an open, circular path from which each retail section is clearly visible.
CAPTION: The redesigned jewelry department at the Springfield store. Montgomery Ward is spending up to $2 million per store to renovate 40 locations. Shirley Kregal inspects apparel aimed at a more stylish customer, part of the "new Wards."
Montgomery Ward Holding
Business: The largest privately held retailer in the United States; operates about 250 Montgomery Ward department stores in more than 30 states.
Special status: Currently operating under Chapter 11 bankruptcy protection. As part of the reorganization of Wards,
General Electric is buying
all of the company.
Sales In Billions
Net loss In Billions
SOURCES: The company, Hoover's, Securities and Exchange Commission