Imagine for a moment, you live in a world where
one company sells absolutely everything. And
I don't just mean, you know, books and some electronics.
I mean everything. You need a dress for a wedding.
They've got it. A hammer for a project. Done.
A hundred piece dinner set. No problem. Okay.
That's already sounding pretty comprehensive.
But what if you need the actual lumber? the nails,
the shingles, the blueprints to build an entire
house. They will pack it all up and ship it directly
to your door. So you're basically describing
Amazon on steroids. Or like some kind of futuristic
mega corporation from a sci -fi movie? It sounds
exactly like Amazon. That is the parallel everyone
immediately jumps to. But what if I told you
this company was doing all of this at scale starting
in 1872? Then you'd be talking about the original
everything store. You'd be talking about Montgomery
Ward. That is exactly where we're going today.
Welcome back to the Deep Dive. We are unpacking
the life, the very slow motion death, and the
very, very strange afterlife of an American icon.
It is a truly fascinating case study. I think
for a lot of our listeners, Montgomery Ward is
just this this faint, dusty memory. Maybe they
remember seeing the name in a mall back in the
80s or 90s. Or they remember their parents or
grandparents using that nickname. Monkey Wards.
Monkey Wards. Yes. That nostalgia is a huge piece
of it. It was just. ubiquitous. I mean, the brand
was a fixture in American life for over a century,
from 1872 all the way to 2001. That's a massive
run. It's a huge run. But when you really dig
into the records, which is what we've done, we've
got the corporate history, financial reports,
leadership timelines. It's not just a story about
another department store that went out of business.
No, not at all. If you look closely, it's a story
about the invention of modern retail as we know
it. It's a story about a constitutional crisis
that involved the U .S. Army physically seizing
a company. Which is just a wild story we'll get
to. Oh, it's unbelievable. And it's also a story
about a fatal economic miscalculation that you
could argue fundamentally changed the entire
landscape of the American suburbs. So that's
our mission for this deep dive. We're going to
trace the full life cycle of this retail giant.
We're going from the invention of the mail order
business, which was, you know, the Internet before
the Internet, to that dramatic movie -like showdown
during World War II, to the post -war mistake
that sealed their fate, and finally to where
they are now, which is, well, it's complicated.
It's very complicated. We are looking at a classic
zombie brand situation. A zombie brand. I love
that term. But before we get to the zombies,
we have to start at the birth. So let's rewind
the clock. It's 1872. We're in Chicago. A man
named Aaron Montgomery Ward. What's the vibe
here? The vibe is 100 % startup. Pure and simple.
We tend to think of the 19th century as being
dusty and slow and old timey. Right. Separated
from us by all those sepia toned photos. Exactly.
But Chicago in 1872 was anything but slow. It
was this period of rapid, almost chaotic disruption.
The city was literally rising from the ashes
of the Great Fire of 1871. It was a hub of energy,
of capital, of new ideas. And Aaron Montgomery
Ward, he was a guy who saw a very specific problem.
And what was the problem he was trying to solve?
Well, he'd spent years as a traveling salesman
for other companies. He was out in the rural
Midwest talking to farmers, and he realized that
the rural customer was getting an absolutely
raw deal. How so? It was about isolation. If
you lived on a farm in 1872, you couldn't just
hop in your car and drive to a mall. You were
at the total mercy of the local general store.
And because that store had a monopoly, the owner
could charge whatever they wanted. The selection
was awful, the prices were sky high, and often
you had to buy on credit. Ah, so they kept you
in debt. It was an economic trap. Ward saw this.
He also saw the rise of the Grange movement.
These were organizations of farmers banding together
to fight against monopolies, especially the railroads
and middlemen. He saw this organized, frustrated
customer base and had a radical idea. Okay, what
was it? He thought, what if I can sell directly
to these people? What if I can cut out the middleman,
bypass the general store entirely, and ship goods
straight from the manufacturer to the farmer
for cash? That sounds incredibly modern. That's
literally the direct -to -consumer. BTC model
we talk about today with brands like Warby Parker
or Casper mattresses. It is the exact same principle.
Cut out the middleman to lower the price and
increase the selection. But, you know, doing
it in 1872 required a completely different kind
of infrastructure and a whole lot of trust. Right.
And the actual founding story is a little. The
records are a bit conflicting, which I think
adds to the mythos of it. I saw some sources
say his first office was just a single room on
North Clark Street. Right. Very humble. Just
a desk and a chair, basically. But the other
story, the other location mentioned, is in a
loft above a livery stable on Kinsey Street.
A livery stable. I love that detail. It's so
much more romantic. It paints such a vivid picture,
doesn't it? It really does. You can just imagine
the smell of the horses downstairs, the sound
of hooves on cobblestone, the dust. And up in
this loft, you have Aaron Montgomery Ward and
maybe one or two partners trying to launch a
retail revolution. It is the 1872 version of
Steve Jobs and Wozniak in the Garage. It absolutely
is. And their first product wasn't a fancy computer.
It was a single sheet of paper. A single sheet.
Not even a booklet. The very first catalog was
just a price list on a single sheet of paper,
listing the goods he could get and their prices.
But it promised something truly revolutionary,
something that built the whole enterprise. Satisfaction
guaranteed or your money back. That was the magic
phrase. We take that completely for granted now.
But back then. It was unheard of. It was a world
of caveat emptor buyer beware. You bought something.
It was your problem. Ward introduced trust into
a trustless system. He was telling these deeply
skeptical farmers, send me your cash, real cash
through the mail. And if you don't like what
I send you, I promise I will send your money
back. That was the key that unlocked the entire
mail order business. And once that trust was
established, the scaling was. It was just insane.
We have some numbers here that are just mind
-blowing for a pre -computer, pre -logistic software
era. The growth curve is basically a vertical
line. So by 1883, that's just 11 years after
starting in that stable, the catalog is already
240 pages long. And it lists... 10 ,000 different
items. 10 ,000 items. Just stop and think about
the logistics of that in 1883. You don't have
an Excel spreadsheet. You don't have inventory
management software. You don't have barcodes
or scanners. You have ledgers, pens and human
brains. And you have to physically source. 10
,000 unique things. Everything from sewing needles
to farm plows. Get an artist to draw an engraving
of it, write a description, set a price, and
then actually have it in a warehouse ready to
ship when an order comes in from, say, rural
Kansas. It's an operational miracle. It really
is. But wait, here's the stat that just made
me stop and reread the source material. Yeah.
We fast forward to 1904. Okay, turn of the century.
In 1904, Montgomery Ward is mailing out three
million catalogs. Three million. And each of
these catalogs weighs four pounds. That's about
1 .8 kilograms. Four pounds. Whoa. Okay, let's
just do the math on that because the number is
hard to even comprehend. I did the math. Three
million catalogs at four pounds each. That is
12 million pounds of paper. 12 million pounds
of paper moving through the U .S. postal system.
That's 6 ,000 tons. Think about the number of
train cars you would need just to move that paper.
Think about the rural post offices. You have
a tiny post office in a small town in Nebraska,
and suddenly thousands of these four -pound bricks
arrive for delivery. It must have completely
overwhelmed the system. It was an information
overload, but a physical one. And you have to
understand, for the person receiving it, that
catalog was the Internet. It was their connection
to the wider world. They famously called it...
the wish book or the dream book the whole family
would gather around it at night by the fire it
wasn't just about buying things it was about
dreaming you could flip through the pages and
see what the latest fashions were in new york
or even paris you could see new technologies
new tools you didn't even know existed it brought
the entire global marketplace right to your farmhouse
doorstep that's a really powerful image the wish
book it really drives home how emotional the
connection to that brand was it wasn't just a
store it was a lifelong to modernity. Absolutely.
But as with any massive success, you can't stay
the king of the hill forever. You invite competition.
And we have to talk about the rivalry. The great
rivalry. You can't tell the story of Ward without
talking about the other guy. Richard Warren Sears.
Enter the challenger. Sears gets into the general
catalog game in 1896. And almost immediately
it becomes this clash of the titans. It's really
interesting to compare their styles. Aaron Montgomery
Ward was seen as more dignified, the satisfaction
guaranteed pioneer. Richard Sears, he was a showman.
He was a born promoter. His copywriting was more
aggressive, more sensational. And the numbers
show just how tight this race became and how
fast. By 1900, it's only four years after Sears
launched his big catalog. Montgomery Ward had
sales of $8 .7 million, which is a huge number.
Massive for 1900. An absolute behemoth. But Sears
had $10 million. So in just four years, Sears
had already caught up and edged slightly ahead.
They were neck and neck from the get go. And
this rivalry, Ward versus Sears, it basically
defined the entire 20th century retail landscape.
It is the original great American business rivalry.
It's Coke versus Pepsi. It's Apple versus Microsoft.
And families would take sides. Right. Oh, absolutely.
You were a Sears family or you were a Ward family.
It was part of your identity. You trusted one
wish book over the other. And this incredible
growth, this intense rivalry, it required a massive
physical footprint. We can't just talk about
the catalog. We have to talk about the buildings.
In 1908, Ward opens the Montgomery Ward & Co.
Catalog House in Chicago. The Catalog House.
Even the name sounds monumental. It was. It was
a 1 .25 million square foot building. It stretched
for blocks along the Chicago River. And it wasn't
just a functional warehouse. It was an architectural
statement. It had this prominent tower. It had
a statue on top called the Spirit of... progress.
It was a monument telling the world, we are here,
we are permanent. And they didn't just stop in
Chicago. They started building these giant distribution
centers all over the country. They built these
concrete fortresses, Baltimore, Fort Worth, Kansas
City, Portland, St. Paul. The list goes on. And
the sources note that in many of these cities,
the Montgomery Ward building was the largest
industrial structure in the entire city at the
time it was built. So they were the skyscrapers
of their day. But instead of offices, they were
just packed to the rafters with goods. They were
the physical manifestation of their logistical
dominance. You can think of them like the Amazon
fulfillment centers of today, but they were built
out of reinforced concrete to last a thousand
years. In fact, many of them are still standing
today, repurposed as condos or offices because
they're so well built, you basically can't tear
them down. So, OK, we've got this mail order
empire, these colossal buildings, millions of
catalogs, millions in. sales. They are the absolute
kings of the logistics game. But then we get
to the 1920s. And the source material frames
this as the pivot. This is a really crucial moment,
a major strategic decision. Up until 1926, Montgomery
Ward is mail order only. That is their entire
identity. They do not have stores. You can't
just walk in and buy a dress off a rack. Which
seems so weird to think about now because my
entire memory of them is as a physical store
in a mall. Exactly. But for their first 50 plus
years, they were purely remote. But in the 1920s,
the world started to change in a fundamental
way. The automobile. The Ford Model T. All of
a sudden, that rural farmer isn't trapped on
the farm anymore. He can get in his car and drive
to the nearest city. He can shop. The old general
store monopoly that Ward was built to fight was
now being broken by the automobile. So Ward's
leadership realizes they have to go where the
people are now going. They have to open physical
retail stores. In 1926, they break with a half
century of tradition. They open their very first
retail outlet store in Plymouth, Indiana. And
this wasn't a slow let's dip our toe in the water
kind of rollout. This was a full on blitz. Aggressive
doesn't even begin to describe it. Listen to
this growth curve. They have one store in 1926.
By 1928, just two years later, they have 244
stores. Wow, 244. That's opening a new store
roughly every three days for two years straight.
And they're not done. By 1929, 531 stores. They
went from zero retail stores to 531 in three
years. Think about the operational strain of
that. It's just mind -boggling. You have to find
the real estate in over 500 different towns.
You have to negotiate and sign the leases. You
have to hire store managers, hire clerks, train
them. You have to stock all the shelves. You
have to completely re -engineer your distribution
network from a ship -to -customer model to a
ship -to -store model. And again, you have to
do all of that without computers, without any...
modern communication tools. It was an incredibly
high risk, high speed pivot. High risk. And as
it turns out, just terrible timing. The worst
possible timing in American history. Because
what happens in late 1929? The stock market crashes.
The Great Depression begins. So they have just
massively overextended themselves, spent all
this capital opening hundreds of stores, and
suddenly their customers have no money. It was
a catastrophe. By 1930, Ward is struggling badly.
They're bleeding cash. And interestingly, the
sources note that in 1930, they actually decline
a merger offer from their rival Sears. Wow. Imagine
that alternative history for a second. A combined
Sears -Ward monopoly heading into the Depression.
It would have been a colossus. We'll come back
to that idea later. But in 1930, they say no.
They want to try and go it alone, but the investors
are panicking. The stock price is in the tank.
So J .P. Morgan Jr., yes, the son of that J .P.
Morgan, intervenes. When a Morgan gets directly
involved, you know things are serious. The heavy
hitters are now calling the shots. And they decide
the current leadership team isn't cutting it.
They need a fixer. They need a tough guy to come
in and turn the ship around. And that's when
Sewell Avery enters the picture. Sewell Avery.
This name is going to become very, very important
to our story. Describe him for us. What kind
of person are we talking about here? He is a
serious man. He came from the U .S. Gypsum Corporation.
That's building materials. He wasn't a retailer
by trade. He was a ruthless numbers guy. He was
known for being stern, conservative, disciplined,
and very autocratic. He believed in top -down
control. So he takes over as president in 1931.
What are his first moves? He does exactly what
you'd expect a fixer to do. He cuts the fat.
He starts closing the unprofitable news stores.
He fires staff to slash payroll. But he also
makes a really brilliant observation about the
business itself. He realizes that the company
is trying to run its news stores like they're
pages in a catalog. What do you mean by that?
Well, the store managers were all catalog guys.
They knew logistics, they knew inventory, but
they didn't understand things like visual merchandising
or customer service or how to lay out a store
to encourage browsing. So Avery fires the catalog
guys from the stores and hires actual experienced
store managers. That seems like such common sense,
but I guess when you're in the middle of a massive
chaotic pivot, you can miss the obvious. Exactly.
He professionalized the retail side of the business.
He brought in discipline. And it worked. It really
did. The records show they were profitable again
before the end of the 1930s, right in the middle
of the Depression. This is the era that cemented
the image of the Montgomery Ward store for a
generation. The green awning stores. If you look
at photos from the late 30s, you see these tidy
storefronts with distinctive green awnings dotting
main streets all across America. Thanks to Avery,
by the end of the decade, Montgomery Ward is
the country's largest retailer. So at this point
in the story, Sewell Avery is the hero. Absolutely.
He's the man who saved the company from the Great
Depression. He's the king of retail. He can do
no wrong. But then the 1940s happen. And this
is where the story takes a sharp turn from a
business case study into more of a political
troller. This is Section 3, the showdown, the
government seizure. I have to say, I was genuinely
shocked by this part of the research. I had no
idea this ever happened. It's one of the most
dramatic confrontations between a corporation
and the U .S. government in history. And yet
people have almost completely forgotten about
it today. So set the scene for us. It's 1944.
The country is in the thick of World War II.
Right. The entire U .S. economy is mobilized
for the war effort. Factories are churning out
tanks and planes. Labor is tight. And the government
has set up a body called the War Labor Board
specifically to prevent strikes because a strike
means stopped production and stopped production
hurts the war effort. And what's going on at
Montgomery Ward at this time? There's a massive
labor dispute, a nationwide strike involving
about 12 ,000 workers. They want better wages,
and they want the company to recognize their
union. And the War Labor Board steps in to mediate.
They do more than mediate. They order Sewell
Avery to settle the strike. They tell him, you
need to recognize the union. You need to extend
the workers' contract. The country needs its
goods distribution network running smoothly for
morale and for the economy. And Avery, the man
who saved the company by being tough and unyielding.
He does what he always does. He digs in his heels.
He flat out refuses. He just says no to the federal
government during wartime. He defies them. His
argument was that Montgomery Ward was not a war
industry. He basically said, we sell clothes
and furniture. We don't make bullets. The government
doesn't have the authority to tell me how to
run my business. He is throwing down the gauntlet.
And challenging the president of the United States,
Franklin Delano Roosevelt. He is. And FDR, especially
in 1944, was not a man you wanted to challenge.
He saw this as a threat to his authority and
to the war effort. So what happened next? The
president did not blink. In April of 1944, FDR
issued Executive Order 9438. He cited the War
Labor Disputes Act and his powers as commander
in chief, and he ordered the Secretary of War
to seize all Montgomery Ward properties nationwide.
Seize the company. That sounds so abstract, but
this was not an abstract event. Not at all. It
was incredibly physical and dramatic. U .S. Army
troops, we're talking actual soldiers in uniform
with helmets and rifles, marched into the Chicago
headquarters of Montgomery Ward. Can you just
imagine being an employee there? You're sitting
at your desk, you're typing up an invoice for
a sofa, and suddenly a platoon of soldiers walks
into your office building. And they march straight
up to the executive suite to Sewell Avery's office.
The attorney general of the United States is
with them. And Avery still refuses to comply.
He still won't leave. He sits calmly at his desk
and refuses to budge. According to the reports,
he told the attorney general to hell with the
government. He was going to force them to physically
remove him. So what did the soldiers do? They
picked him up. Yeah. Literally. There's an incredibly
famous photograph of this. It was on the cover
of newspapers all over the country. Two soldiers
are holding Sewell Avery in the air by his arms
and legs, carrying him out of his office like
he's a piece of furniture. I've seen that photo.
His face. He looks so dignified, but absolutely
furious. He's wearing this pristine suit and
tie, and he's just staring at the camera with
this look of pure contempt. They carried the
CEO of America's largest retailer out of his
own building and essentially dumped him on the
sidewalk. That is just unbelievable. It's such
a perfect symbol of that clash between corporate
autonomy and government power during a national
emergency. It became a massive political scandal.
Conservatives and business leaders saw Avery
as a martyr for private property rights. Liberals
and union supporters saw him as an arrogant traitor
who was obstructing the war effort. It immediately
went to the courts. And how did it all get resolved
in the end? Well, ultimately the war ended. In
1945, with the national emergency over, President
Truman ended the seizure of the company. The
Supreme Court case that was pending was dismissed
as moot because the government had already given
the property back. Sewell Avery walked right
back into his office and took control again.
So in a way, he won. He outlasted the government.
Got his company back, yes. But here is the critical
twist in the story. The trauma of that event,
or perhaps just his own deepening pessimism,
it set the stage for the next and most disastrous
chapter of the company. Section four, the fatal
miscalculation. This is the real tragedy. If
the government seizure was the climax of the
movie, this is the tragic downfall of the main
character. So Avery is back in charge. It's 1945.
The war is over. The GIs are coming home. The
general mood in America is one of... Relief,
right? Yeah. And optimism. The post -war boom
is just starting to bubble up, but that is not
what Sue Lavery saw. What was his prediction
for the post -war economy? He looked at history.
He looked at the recession that happened after
World War I. He looked at the Great Depression
that he had just so brilliantly navigated. And
he became convinced, absolutely 100 % convinced,
that the post -war economic boom was a temporary
illusion. He believed the U .S. was about to
fall back into a massive, crippling depression.
Now, to be fair to him, he wasn't the only economist
or business leader who feared that. It was a
common concern. It was a concern, yes. But his
reaction to that fear was extreme and total.
What was his strategy then to prepare for this
coming depression? One phrase, hoard cash. He
decided to freeze the company in time. The goal
was to preserve liquidity above all else. He
thought when the inevitable crash comes. Sears
will go bankrupt. JCPenney will go bankrupt.
And I will be the only one sitting on a mountain
of cash. I will buy all of my competitors for
pennies on the dollar. That's an incredibly bold
contrarian bet on the future of the American
economy. It's the kind of strategy that makes
you look like an absolute genius if you're right
and an absolute fool if you're wrong. And how
strictly did he enforce this company wide freeze?
It was draconian. The rule was. No new stores,
period. None at all. Zero. At the very moment
that the American suburbs are being born, while
Levittown is going up, while the baby boom is
starting and families are moving out of the cities,
Montgomery Ward builds zero new stores to serve
them. That's stunning. And what about the stores
they already had? This is the detail that really
stuck with me from the store's material. He did
not even permit his managers to spend money on
paint. He wouldn't let them paint the walls of
the stores. No paint, no new light fixtures,
no renovations. He effectively ordered his company
to let its stores rot from the inside out. So
just try to imagine the customer experience in,
say, 1950. You walk into a Montgomery Ward. It
looks exactly like it did in 1935. It's dingy.
The paint is literally peeling off the walls.
The lighting is bad. It feels old. It feels tired.
It feels depressing. And then you get in your
car and you drive five minutes down the road.
to the brand new Suburban Shopping Center. And
there is a brand new Sears. And it's bright,
and it's modern, and it's well -stocked with
the latest goods. And most importantly, it's
right there in the middle of the new suburb where
you and all your neighbors live. It's a complete
no -brainer for the consumer. It was a slaughter.
Sears snapped up all the prime real estate locations
in the new booming suburbs. They captured the
loyalty of an entire new generation of American
families. And Montgomery Ward just sat on its
pile of cash, getting older and sadder, waiting
for a depression that never came. The source
material puts it so bluntly. A conservative strategy
became a death sentence in a booming economy.
That's the perfect summary. Avery had brilliantly
prepared for an economic winter. But what America
got. was an endless summer. At some point, the
shareholders must have revolted against this.
They did. But it took a shockingly long time.
It wasn't until 1955. That's a full decade after
the war ended. A completely lost decade. And
in the world of retail, you cannot afford to
lose a decade and survive. The damage is permanent.
So in 1955, an activist investor named Louise
Wilson launched a high profile proxy fight. A
proxy fight is basically when an outsider tries
to convince all the other shareholders to vote
with him to kick out the current board of directors.
It was a nasty very public battle. Wolfson just
pointed to the obvious. Ward was dying on the
vine while Sears was conquering the world. And
he won. Well, he didn't get full control, but
he put enough pressure on the board that the
aging Sewell Avery was finally forced to resign.
The king was dethroned. But the damage was already
done. Oh, it was irreversible. Sears had all
the best locations. Ward had a pile of cash,
but nowhere to put it. They were now and would
forever be a second tier player. So this ushers
in the struggle for identity era. Section five.
The 60s, 70s, and 80s. This whole period is just
painful to watch if you're a student of business
strategy. It's basically three decades of flailing.
They're just trying everything they can think
of to catch up. In 1961, they bring in a new
president, Robert Elton Brooker. And you'll never
guess where they found him. He was a former vice
president and board member at Sears. Of course,
the classic, if you can't beat them, hire them
strategy. And he brought a bunch of Sears managers
with him. They tried to streamline the company,
make it more efficient. The source notes mentioned
some pretty drastic cuts. They slashed the number
of suppliers they used from 15 ,000 down to 7
,000. They cut the number of different brands
they carried from 168 down to just 16. So they
were trying to be more efficient, focusing on
their own private label goods. And it helped
the bottom line for a little while, but it didn't
solve the fundamental problem, which was nobody
knew what Montgomery Ward was anymore. Were they
a high -end store? A discount store? A rural
store. A suburban store. They had no clear identity.
And then the corporate weirdness really begins.
The mergers. In 1968, they merge with the Container
Corporation of America. A company that makes
cardboard boxes. To form a new entity called
MarCore. MarCore. It sounds like the name of
a villain's company in a James Bond movie. It
really does. It was a classic conglomerate. The
idea in that era was to smooth out the business
cycles of different industries. But it gets even
stranger. In 1974, a very, very big fish enters
the pond. Mobile oil. Yes. The company with the
gas stations and the flying red horse. Okay,
I have to stop you here because this makes no
sense on the surface. Why on earth would an oil
company want to own a struggling department store?
You have to put yourself in the context of the
mid -1970s, the oil crisis. Oil prices were going
through the roof. Mobil was absolutely drowning
in cash. But they were also worried. They thought
maybe the oil era is ending. Maybe the government
will break us up for being a monopoly. We need
to diversify our assets. So they went shopping
for a non -oil business. They wanted to buy a
big, established American company that was completely
different from oil. And they landed on Marcor.
By 1976, Mobil owned Montgomery Ward outright.
It just feels like such a mismatch. The skill
set required to sell gasoline and the skill set
required to sell bed sheets feel very, very different.
It was a massive culture clash. The oil executives
in their New York headquarters just did not understand
the rhythms of retail. They didn't understand
fashion cycles or the importance of the Christmas
rush. But to their credit, under Mobil's ownership,
they did try some innovative things. I was really
interested in this home computer project I found
in the notes. Ah, the Cyber Vision 2001. Yes.
The year is 1978. This is extremely early in
the home computer game. This is just a year after
the Apple II and the Commodore PET came out.
And Montgomery Ward decides they're going to
sell a home computer under their own brand name.
The CyberVision. It sounds so futuristic. And
it was for the time. It connected to your television
set. It used cassette tapes to load data and
programs. But it failed. It was a total failure.
There were manufacturing problems with the company
they partnered with. And frankly, the idea of
buying a computer from a department store catalog
was... a really hard sell when specialized computer
stores were starting to pop up. They pulled the
plug by the early 80s. But it shows they were
at least trying. They weren't completely asleep
at the wheel. They were trying to find that next
big thing that would save them. And they also
tried to pivot hard into the discount market
with this Jefferson Ward experiment. This is
another one of the great heartbreaks of their
late history. By 1980, Mobile's management realizes
that the traditional ward stores are just bleeding
money. But they look at the market and see who's
winning. The discounters. Kmart was huge. And
this new cool player called Target was on the
rise. Exactly. Target was the upscale discounter.
So Mobile looks at its portfolio of assets and
realizes they own this small, successful discount
chain in Florida called Jefferson Stores. They
have a light bulb moment. Aha! We will rebrand
our worst performing Montgomery Ward stores as
Jefferson Ward. We will become the next Target.
On paper, that sounds like a pretty decent plan.
It wasn't a terrible idea, but the execution.
Execution is everything in retail. They tried
to expand way too fast. They decided to convert
about a third of all Montgomery Ward stores into
Jefferson Ward stores almost overnight. And the
staff just couldn't handle that kind of rapid
change. The management team from the small Florida
chain was completely overwhelmed. They didn't
understand the northern markets. The source material
notes that the buyers in the north didn't understand
the southern markets. They were stocking things
that sold well in Miami in stores in Minneapolis
in the middle of winter. So they had like swimsuits
for sale during a blizzard. Essentially. The
inventory mix was all wrong. The logistics broke
down. And this idea that was supposed to be their
savior turned into a massive cash drain that
was dragging down the whole company. And the
final outcome. They gave up and sold the entire
Jefferson Ward chain to another retailer, Bradley's,
in 1985. It was another high -profile, expensive,
failed pivot. And speaking of endings, 1985 is
also the year the catalog died. The 113 -year
-old catalog, the wish book, the very thing that
started the entire company, they shut it down.
Why would they do that? The official reason was
that they wanted to focus all their energy on
creating these boutique -like specialty stores.
They saw the catalog as an anchor to their rural
past. They wanted to be modern and suburban.
It just feels like they're throwing things at
the wall at this point. Let's be Target. Now
let's be a collection of boutiques. No, let's
sell computers. It is the perfect definition
of a company that has lost its soul. They are
completely reactive, not proactive. They're just
chasing everyone else's tail instead of figuring
out who they are. And mobile eventually just
got tired of throwing good money after bad. By
1988, mobile wanted out. The great diversification
strategy of the 70s was a bust. They wanted to
go back to just being an oil company. So they
spun it off in a leveraged buyout. A massive
$3 .8 billion deal. The management team at the
time, led by a man named Bernard Brennan, bought
the company back from Mobil. Montgomery Ward
was independent once again. So we're heading
into the 1990s. The company is independent again.
But is it healthy? No. It's on life support.
And the world around it is getting much, much
more competitive. This brings us to section six,
the slow decline and death. The retail landscape
of the 90s was just brutal. You had the unstoppable
rise of the category killers. Stores like Best
Buy for electronics, Toys R Us for toys, Home
Depot for hardware. Exactly. If you wanted a
specific thing like a television, you went to
Best Buy because they had the best selection
and prices. If you wanted a hammer, you went
to Home Depot. Why would you ever go to Montgomery
Ward for those things? And for general merchandise,
you had the planet killing juggernaut that was
Walmart. And on the other end, Target had successfully
captured the cheap but stylish demographic. Montgomery
Ward was squeezed to death in the middle. It
was seen as your grandparent's store. It wasn't
cheap enough to compete with Walmart. It wasn't
cool enough to compete with Target. And it didn't
have the deep selection of the category killers.
So the erosion of their traditional customer
base was just steady and unavoidable. In 1997,
the inevitable happened. They filed for Chapter
11 bankruptcy protection. Bankruptcy number one.
This is usually the beginning of the end. They
tried a massive restructuring. They emerged from
that first bankruptcy in 1999. But now they were
a wholly owned subsidiary of GE Capital. GE Capital.
So another massive non -retail conglomerate owner.
GE was their biggest creditor during the bankruptcy.
So they essentially took ownership of the company
in exchange for the debt that was owed to them.
And they tried one last desperate pivot. The
Great Wards rebrand. That's right. They dropped
the Montgomery. They were just wards. They got
a new. modern logo. And they had that store within
a store concept, Electric Avenue. Yes. They tried
to make their electronics department look and
feel just like a Best Buy inside the larger store.
They used flashy neon signs and more open layouts.
They spent millions and millions of dollars renovating
stores to make them look more consumer friendly.
It was a final last ditch effort to become relevant
again. It really was. They were trying to spend
their way out of irrelevance. But then comes
Christmas of 2000. The ghost of Christmas past.
The entire retail sector lives and dies by the
sales numbers in the fourth quarter. And the
holiday sales numbers for awards came in and
they were soft. They were much lower than anyone
had expected. And GE Capital was watching closely.
GE Capital is a finance company. They look at
spreadsheets. They don't have an emotional attachment
to retail. They had promised to keep funding
the restructuring, but when they saw those poor
Christmas results, they just did the math. They
realized it would take hundreds of millions more
dollars to even have a chance of saving the ship.
So they decided to cut their losses and let it
sink. They reneged on their promises of future
support. They pulled the plug. The announcement
came on December 28, 2000. Just think about that
timing. Two days after Christmas. Imagine being
an employee. You've just worked through the insane
holiday rush. You're exhausted. And then the
announcement comes down from corporate. Cease
all operations. Effective immediately. Full liquidation.
The human toll was just massive. 250 stores closed.
37 ,000 employees were laid off. 37 ,000 people.
That's the population of a decent -sized American
city all out of a job at once. It was a true
corporate tragedy. And it really highlights the
danger of that last -ditch effort. Sometimes,
by the time you spend all the money to finally
fix the stores, to finally paint the walls that
Sewell Avery refused to paint 50 years earlier,
your customer has already moved on and they're
never coming back. So 2001, the liquidation sales
happen, everything must go. The fixtures are
sold off, the signs come down, the buildings
go dark. End of story. But the name didn't die.
And this brings us to our final and... maybe
weirdest section, the zombie brand. This is such
a strange future of modern commerce. A corporation
can die. Its buildings can be torn down. Its
employees can move on. But its name, its intellectual
property, that can live on forever. Because that
name recognition still has value. People remember
it. Exactly. Even if you hadn't shopped at a
Montgomery Ward in 10 years, you knew the name.
It had a century of built -in trust associated
with it. So who bought the corpse? In 2004, a
direct mail company called Direct Marketing Services
Inc., or DMSI, bought the intellectual property.
The name, the logo, the customer lists. And what
did they do with it? And the irony here is just
so rich, it's almost unbelievable. They pivoted
the brand back to an online and catalog based
operation. No way they went back to the roots.
They went right back to the beginning. No expensive
physical stores, just a website and a mail order
catalog. They realized the only real value left
in the brand was in that original direct consumer
model. But there was a big catch, right? This
wasn't really Montgomery Ward coming back from
the dead. A huge catch. The new owners were very
explicit in stating that they did not. honor
any obligations from the old company. So if I
found an old gift card from 1999 in my sock drawer.
It's a worthless piece of plastic. What if I
had a lifetime guarantee on a craftsman style
tool I bought there in 1985? The guarantee was
void. The lifetime referred to the lifetime of
the original company, not your lifetime. And
that company was dead. That is that's so eerie.
It's like the brand is wearing a skin suit of
the old company. It is a zombie. It looks and
sounds like your old friend, but there's no soul
behind the eyes. It's just an empty vessel. And
the zombie kept shambling on. It did. DMSI itself
went to auction in 2008 and the Montgomery Ward
brand was purchased by Swiss Colony. Swiss Colony.
Aren't they the people who sell cheese logs and
sausages and catalogs at Christmas? The very
same. They are masters of the direct mail business.
They know that world better than anyone. They
saw the value in the Ward brand and its mailing
lists. So they relaunched it again. They relaunched
the website in September of 2008. They started
mailing out new Montgomery Ward catalogs in 2009.
And where are they today? Today, the brand is
owned by Swiss Colony's parent company. colony
brands. You can go to wards .com right now. You
can buy furniture, electronics, kitchen gadgets.
They have an installment payment plan. I saw
they have their own house brand of kitchenware,
chef tested. They do. And here is the ultimate
final irony. You can find Montgomery Ward branded
products for sale on Amazon. Wow. That brings
it completely full circle. The company that was
the original Everything Store is now just another
third -party seller on the modern Everything
Store. It's the final destination of the disrupted.
If you can't beat them, you become a feature
on the platform that replaced you. What a wild
ride. From a loft above a livery stable in Chicago,
to a four -pound wish book, to a showdown with
FDR, to the mobile oil boardroom, and finally
to a zombie website selling air fryers on Amazon.
The story of Montgomery Ward is basically the
entire history of American consumerism wrapped
up in the timeline of one company. So let's unpack
this. Let's step back. What does it all mean?
Why should you, our listener, care about an apartment
store that died more than 20 years ago? I think
it matters because it's a powerful lesson that
breaks the illusion of invincibility. In its
day, Montgomery Ward was the biggest. They were
the original innovator. For decades, they seemed
absolutely untouchable. And they still died.
They died because of one catastrophic, decade
-long strategic mistake. The final decline was
long and slow, but the mortal wound was self
-inflicted in 1945 by Sewell Avery's refusal
to adapt. It makes you realize that sometimes...
Playing it safe can be the absolute most dangerous
move a company can make. Exactly. You cannot
save your way to success in a growth market.
Sometimes you just have to paint the story. You
have to build the new location where the customers
are. And I can't help but keep coming back to
that what -if scenario you mentioned earlier,
that merger offer in 1930. The Sears -Ward super
company. If they had merged back then, they would
have had incredible scale and power. Do you think
they would have survived the rise of Walmart
and Amazon? That is the billion dollar question,
isn't it? If they had merged, they would have
had the resources to maybe fight off Walmart
in the 70s and 80s. Or maybe they would have
just been a bigger, slower target. A bigger dinosaur
for the asteroid to hit. Merging two companies
that are both struggling to adapt to a new reality
usually just creates a larger, more dysfunctional
company that struggles to adapt. Culture eats
strategy for breakfast. And if the culture at
the top was don't innovate. hoard cash, a merger
wouldn't have fixed that fundamental problem.
That's a really profound thought. Scale doesn't
guarantee survival. Adaptability is what guarantees
survival. So here's our final provocative thought
for you, the listener. We all look at the giants
of today. We look at Amazon, at Google, at Walmart.
They seem eternal. They seem like they will be
here 100 years from now. Just like Montgomery
Ward seemed to a farmer looking through the wishbook
in 1930. So as you look at today's corporate
landscape, ask yourself this, who is the Sewell
Avery of today? Which giant tech company or retailer
is sitting on a massive pile of cash, getting
complacent and refusing to paint the store? Who
is playing defense while the next great disruption
is being quietly born in a garage or maybe a
modern day livery stable somewhere? That's the
question to keep asking. Thank you for listening
to this deep dive into the incredible rise and
the tragic fall of Montgomery Ward. We'll be
back next time with another stack of sources
and another fascinating story. Keep looking for
the patterns. See you next time.