MONTGOMERY WARD TO CLOSE 48 UNDERPERFORMING STORES

Furniture World Magazine

Montgomery Ward & Co., Incorporated announced today that it has identified 48 underperforming store locations for closure as part of the retailer's strategy for returning to profitability. These store locations were identified after a store-by-store analysis of the Company's operations, and are geographically dispersed throughout the national chain These stores are in addition to the eight store closings previously announced this year. The plan, which is subject to bankruptcy court approval, includes an exit from the Orlando, PL and Albany, NY markets leaving Montgomery Ward with a core of 294 full line department stores. "In addition to not being focused on a core retail strategy, Wards suffered from having a number of outdated and otherwise underperforming locations and as such we have moved quickly to identify these stores and take the appropriate action, said Roger Goddu, Chairman and Chief Executive Officer.' 'We believe that we can operate each of our remaining stores profitably through merchandise revitalization and a combination of margin enhancement, operational improvements and expense structure adjustments, including lease re-negotiation, however, in the ongoing stores, we will continue to closely monitor and evaluate Wards' performance on a store-by-store basis to ensure that every Wards location is providing measurable benefit to the Company overall." "We are beginning to see the positive impact of our new merchandising strategy and the operational improvements we have put in place' When put together with the closure of our under-performing stores, we will have addressed several of the major areas that contributed to Montgomery Ward's decline," added Goddu. 'Now our focus is on the proper execution of our strategy and dramatic improvement in addressing our core customers' needs as we work to restore Wards reputation in the marketplace." The proposed restructuring would impact approximately 3,800 full and part-time associates. Montgomery Ward will offer reassignment in other Montgomery Ward stores to as many associates as possible. Those who are not offered or do not accept reassignment will be offered location shutdown benefits and out placement assistance as appropriate. The store closings are subject to court approval, and are expected to be substantially completed by the end of December 1997. Wards has already announced the closing of 44 Lechmere and Electric Avenue & More specialty stores earlier this year in addition to the eight Montgomery Ward stores previously mentioned. ''The decision to close stores is never an easy one and we recognize the impact this has on the associates involved and on our customers. However, we believe that moving swiftly to eliminate the source of a significant amount of Wards' losses and taking the related financial charges in fiscal 1997 will enable us to focus solely on the future growth of the business and our turnaround initiatives going forward," added Burnett Donoho, Vice Chairman and Chief Operating Officer of Montgomery Ward. "We hope that many of our associates and customers can be accommodated in nearby Wards, locations. We want to assure any affected customers that we will continue to honor Montgomery Ward warranties and extended warranties through our product service centers as well as our remaining retail locations. Our goal is to make sure that every Wards' customer continues to be satisfied."' Customers who have warrantees or extended warranties may call the toll-free service number 1-800-905-9505 to obtain information on the nearest location for merchandise repairs. Depending on the type of warranty in place. Montgomery Ward will either send a repair person to the customer's home or provide the customer with the ability to drop off the item needing repair at the nearest Montgomery Ward store or another convenient location. Automotive service packages will be honored at any Montgomery Ward Auto Express location. Montgomery Ward is one of the largest privately held retailers in the United States. Upon the completion of its announced store closings Montgomery Ward will operate 294 full line store" in 37 states.