Ward names new chief executive Former president of Toys 'R' Us hired to battle Sears

December 27, 1996|By BLOOMBERG BUSINESS NEWS

CHICAGO -- Montgomery Ward Holding Corp. named Roger Goddu as chairman and chief executive of its retail operations yesterday, replacing Bernard Brennan.

Brennan, who owns a 35 percent stake in the nation's largest privately held retailer, will remain chairman of the holding company that controls the retail division, a credit-card company and Signature Group, which sells life insurance and legal services.

Analysts said that General Electric Co.'s finance unit, which owns 49 percent of Montgomery Ward, pushed Brennan aside because of the retailer's weak performance. They added that his successor would face the same challenge: Sears, Roebuck & Co.

"Montgomery Ward's in sad shape," said Kurt Barnard, president of Barnard's Retail Marketing Report. "How can a small company like that go up against Sears. How can you make consumers prefer Ward? I don't have an answer for that."

Goddu, formerly the president of Toys 'R' Us Inc.'s U.S. toy store merchandising, has 26 years of experience in the retail industry, including Dayton Hudson Corp.'s Target stores.

Montgomery Ward announced in October that it was looking for a new head of its retail unit.

While the 400-store Montgomery Ward chain was able to hold its own against Sears for several years, Sears' dramatic turnaround in the past five years has made it a much stronger competitor, said Barnard. Brennan's ouster is a sign that General Electric is ,, getting less patient and wants results, he said.

"Clearly they are not in business to lose money," said Barnard. "What they had hoped was to see the chain expand and appreciate in value and then unload it at a big profit."

Since 1988, however, when General Electric joined with Brennan and Ward's management in a $3.8 billion leveraged buyout, the retailer's performance has lagged behind as Sears' has improved.

Ward's earnings declined 91 percent to $11 million in 1995 on sales of $7.1 billion, according to Crain's Chicago Business.

In a prepared statement, Brennan said the company is focusing on turning around its operations.

"1996 is a transition period for Montgomery Ward," said Brennan. "The company is making major investments in home products as a growth vehicle."

Pub Date: 12/27/96

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